Bare Act Sec.1964

A.P.
Cooperative Laws
A.P. Cooperative Societies Act 1964
THE ANDHRA PRADESH
CHAPTER I
CO-OPERATIVE SOCIETIES ACT, 19641

[Act No. 7 of 1964]
Preliminary
1.
Statement of Objects and Reasons

(1)
(2)
The Andhra Pradesh (Andhra Area) Co-operative Societies Act, 1932 and
the Andhra Pradesh (Andhra Area) Co-operative Land Mortgage Banks
Act, 1934 are in force in the Andhra Area of the State, while the
corresponding Acts in force in the Telangana Area of the State and in the
territories transferred from the State of Madras to this State are the Andhra
Pradesh (Telangana Area) Co-operative Societies Act, 1952, the Madras
Co-operative Societies Act, 1932 and the Madras Co-operative Land
Mortgage Banks Act, 1934. In order to have a uniform law on the subject
throughout the State, it has been decided to enact a single comprehensive
law applicable to the entire State, taking into consideration the provisions
of the Acts in force in the different areas of this State and the Model Bill
formulated by the Central Committee on Co-operative law.
2.
As Land Mortgage Banks are also being registered under the Co-operative
Societies Act and are subject to the provisions of that Act, it is considered
that there is no advantage in retaining separately the Co-operative Land
Mortgage Banks Act on the Statute Book and that the special provisions
required for Co-operative Land Mortgage Banks could as well be embodied
in a separate Chapter in proposed legislation itself repealing the said
Land Mortgage Banks Act.
Be it enacted by the Legislature of the State of Andhra Pradesh in Fifteenth

year of the Republic of India as follows:
2.
This Act may be called the Andhra Pradesh Co-operative Societies

Act, 1964.
(2)
It extends to the whole of the State of Andhra Pradesh.
(3)
It shall come into force on such date1 as the Government may, by

notification in the Andhra Pradesh Gazette, appoint.
Definitions: [Rule(2)] :
(a)
Bye-laws means the registered bye-laws for the time being in force ;
(b)
"Committee" means the governing body of a society by whatever name

called, to which the management of the affairs of the society is
entrusted;
Co-operative year means, the period commencing on the 1st day of

April of any year and ending with the 31st day of March of the
succeeding year ;]
[(c)
(d)
Dividend means a share of the profits of a society divided among its

members in proportion to the share capital held by each of them ;
(e)
Federal society means a society to which similar class of societies

are affiliated ;
Financing bank means a society, the main object of which is to assist

any affiliated or other society by giving loans or advancing moneys ;
and includes any scheduled bank as defined in the Reserve Bank of
India Act, 1934 (Central Act 2 of 1934) and such other body corporate
or financial institution as may be notified by the Government from
time to time, which gives financial or other aid to a society ;]
(g)
General body in relation to the society means all the members of the
society ;
(h)
General meeting means a meeting of the general body of a society;
[(f)
An Act to consolidate and amend the law relating to Co-operative Societies

in the State of Andhra Pradesh 2[in order to facilitate and strengthen the
functioning of Co-operative Societies based on Co-operative principles and Cooperative identity.]
Received the assent of the President on the 24th February, 1964 and published in
the Andhra Pradesh Gazette, Part IV-B(Ext.), dated the 25th February, 1964.
Added by Act No. 22 of 2001, dt. 25.04.2001.
(1)
In this Act, unless the context otherwise requires,
*******
1.
Short title, extent and commencement:
1.
2.
3.
With effect from 1-8-1964, vide G..O.Ms.No. 1924, dt. 25-7-1964

Subs. by Act No. 22 of 2001. dt. 25.4.2001.
Subs. by A.P. Act No. 19 of 1976
A.P. Cooperative Laws
(i)
registered under this Act ;
Government means the State Government ;

(q)
[(i-a) Gram Panchayat means, a gram panchayat constituted under

Section 4 of the Andhra Pradesh Panchayat Raj Act, 1994 (Act 13 of
1994) ;]
Member means a member of a society, and includes an associate
member ;]
(i)
to the amount, if any, unpaid on the shares held by each of

them ; or
[(j-i) Mandal Parishad means a Mandal Parishad constituted under Section

148 of the Andhra Pradesh Panchayat Raj Act, 1994 (Act 13 of 1994)
;
(ii)
to such amount as they may undertake to contribute to the

assets of the society ;
[(j)
(j-ii)
Municipal Corporation means a Municipal Corporation constituted

under the relevant law for the time being in force relating to the Municipal
Corporations in the State ;
(j-iii)
Municipal Council means a Municipal Council constituted under

Section 5 of the Andhra Pradesh Municipalities Act, 1965 (Act VI of
1965) ;
[(j-iv-) Near relative means father, mother, brother, sister, husband, wife,
son, son-in-law, daughter, daughter-in-law, father-in-law, mother-in-law,
brother-in-law, sister-in-law, nephew and niece;]
(k)
Officer includes a person elected or appointed by a society to any

office of such society according to its bye-laws and a president, vicepresident, chairman, vice-chairman, secretary, assistant secretary,
treasurer, manager, member of committee, liquidator or any other
person elected or appointed under this Act, Rules or the bye-laws to
give directions in regard to the business of the society.
(l)
Prescribed means as prescribed by rules made under this Act;
(m)
Rebate means a share of the profits of a society divided among its

members in proportion to the value of business done by each of them
with the society ;
(n)
Registrar means the Registrar of Co-operative Societies appointed

under Section 3(1) and includes any other person on whom all or any
of the powers of the Registrar under this Act are conferred ;
(o)
Rules means the rules made under this Act ;
(p)
Society means a Co-operative society registered or deemed to be
Inserted by A.P. Act No. 4 of 1995, w.e.f. 2-1-1995.

Subs. by Act No. 6 of 2005, w.e.f. 31-1-2005.
Added by Act No. 6 of 2005, w.e.f. 31-1-2005.
Omitted by Act 10 of 1991.
(r)
Society with unlimited liability means a society, the members of which

are, in the event of its being wound up, jointly and severally liable for
and in respect of all its obligations and to contribute to any deficit in
the assets of the society ;
(s)
State means the State of Andhra Pradesh ;
(t)
Tribunal means a Tribunal constituted under Section 75 and having

jurisdiction ;
Zilla Parishad means a Zilla Parishad constituted under Section 177

of the Andhra Pradesh Panchayat Raj Act, 1994 (Act 13 of 1994).]
[(u)
CHAPTER II
Registration of Societies
3.
(k-i) 4[xxx]
1.
2.
3.
4.
Society with limited liability means a society in which the liability of

its members for the debts of the society, in the event of its being
wound up, is limited by its bye-laws:-
4.
Appointment of Registrar and other persons for the purpose of this

Act:
(1)
There shall be appointed a Registrar of Co-operative Societies for the

State and as many other persons as the Government think fit for the
purposes of this Act.
(2)
Every other person appointed under sub-section (1) shall exercise

under the general superintendence of the Registrar, such powers of
the Registrar, under this Act as the Government may, from time to
time, confer on him.
Society which may be registered: [Rule 2A, Rule 5]

2
1.
2.
3.
4.
[(l)]
A society which has, as its main object, the promotion of the economic
interests of its members in accordance with the Co-operative principles
3
[as may be prescribed], or a society established with the object of

[(2)
5.
facilitating the operation of such a society, may be registered under

this Act.
(ii)
a true copy of the minutes of the meeting at which the

bye laws were adopted duly signed by the applicants;
Every Society registered or deemed to be registered under this Act

shall function subject to such directions as may be issued by the
Registrar, from time to time, in the interests of the Co-operative
movement or the public interest or in order to prevent the affairs of the
society from being conducted in a manner detrimental to the interests
of the members or of the depositors or creditors thereof, and the society
shall comply with such directions.]
(iii)
a sworn statement from each applicant that he is a

member of a different family and particulars furnished in
the application form prescribed are true to the best of his
knowledge and belief;
(b)
Registration with limited or unlimited liability:

(1)
Explanation: For the purposes of this clause, the expression member of

a family means a wife, husband, father, mother, grand-father, grand-mother,
step-father, step-mother, son, daughter, step-son, step-daughter, grand-son,
grand-daughter, brother, sister, half-brother, half-sister and wife of brother or
half-brother;
A society may be registered with limited or unlimited liability but a

liability of a society of which any member is a society shall be limited
:
Provided that where a financing bank becomes a member of a society
with unlimited liability, the liability of that society may continue to be
unlimited.
6.
(2)
The liability of the Government, a financing bank or a federal society

having shares in a society, whether with limited or unlimited liability,
shall be limited to the share capital subscribed by the Government,
such financing bank or federal society, as the case may be.
(3)
The name of every society shall contain the expression Co-operative'

or its equivalent in any Indian language and in the case of every society
with limited liability, the name of the society shall also have as its
suffix the expression Limited or its equivalent in any Indian language.
3[
(2)
Every such application shall conform to the following requirements

namely:
[(a)
Where the objects of the society include the raising of funds to

be lent to its members and where all the applicants are
individuals, the applicants shall reside or own immovable
property in the same town, village or group of villages or belong
to the same class or pursue the same occupation:
Provided that in the case of a society with unlimited liability,
the members thereof shall reside in the same town, village or
group of villages ;
An application for the registration of a society] shall be made to the

Registrar in such form and with such particulars as may, from time to
time, be specified by the Registrar.
1.
2.
3.
4.
(c)
[xxx]Registration of a society: [Rule 3, Rule 3A]
(1)
where all the applicants are individuals, the number of applicants

shall not be less than ten, each being a member of a different
family, and every one of them shall possess eligibility to become
a member as required under sub-section (1) of Section 19 :
[(cc) Where the objects of the Society include production and sales
activity by supplying raw material to members for production of
finished products and where all applicants are individuals, such
applicants shall reside in the area of operations proposed for
the society and belong to the same class or pursue the same
occupation ; and it shall also be competent for the Government
to specify by order such other class of societies, the applicants
of which shall reside in the area of operations as aforesaid and
belong to the same class or pursue the same occupation;]
the application shall be accompanied by:
(d)
the application shall be signed :
(i)
(i)
if the applicants are individuals by every one of such applicants,

and
the original and one copy of the proposed bye laws of the
society as adopted by the applicants ;
Inserted by Act No. 21 of 1985, w.e.f. 22-4-1985.

The words Application for provisional omitted by Act No.22 of 2001, dt. 25.4.2001.
Subs. by Ibid.
Subs by Act No. 22 of 2001, dt. 25.4.2001.
1.
(ii)
(3)
[(4)
Where any question arises under clause (c) of sub-section (2) as to

the residence, ownership, group of villages, class or occupation, such
question shall be decided by the Registrar, whose decision thereon
shall, subject to the provisions of Section 76, be final.
[9-A. Restriction and creation of any charge: Where the Government extends
State aid as specified under section 43 of the Act, such society shall not
dispose of or create any charge over its property without the prior approval of
the Registrar and the consent of the federal society or financing bank
concerned as the case may be.
9-B.
that the application conforms to the requirements laid down by

this Act and the rules made thereunder;
De-Registration of a society: (1) The Registrar shall, at any time, of his

own motion and after giving the society an opportunity of making its
representation, if any, by order, de-register a society which is in existence
for a period not exceeding four years from the date of its registration,(i)
where the membership of the society falls short of the minimum number
prescribed for registration of such society; or
(b)
that the objects of the Society seeking registration are in

accordance with section 4;
(ii)
where the society has not commenced working within the prescribed
period or has ceased to work; or
(c)
that such Society is likely to be economically sound and that

its registration may not have an adverse effect on the
development of the Co-operative movement;
(iii)
(d)
that the proposed bye-laws are not contrary to the provisions of

this Act and the rules made thereunder; and
where in the opinion of the Registrar, the society is conducting its

affairs in contravention of the co-operative principles or in violation of
the provisions of the Act, rules and bye-laws made thereunder or in a
manner detrimental to the interest of its members or the promotion of
the object for which it has been registered; or
(e)
that the applicants are aware of the objects of the society as

specified in Section 4 of the Act and contents of the proposed
bye-laws, he may register the Society and its bye-laws within
such time as may be prescribed.
(iv)
where the society has been registered by fraud or misrepresentation

of facts.
(2)
A society, de-registered under sub-section (1), shall cease to conduct

its business forthwith from the date of such order.
Where the Registrar is not so satisfied, he shall communicate by

registered post the order of refusal together with the reasons thereof
to the applicants within such time as may be prescribed.]
7.
8.
Registration certificate: Where a society is registered the Registrar shall

issue a certificate of registration signed and sealed by him which shall be
conclusive evidence that the society mentioned therein, is a society duly
registered under this Act, unless it is proved that the registration of the
society has been cancelled.
9.
Society to be a body corporate: The registration of a society shall render

it a body corporate by the name under which it is registered having perpetual
succession and a common seal. The society is entitled to acquire, hold and
dispose of property, to enter into contracts on its behalf, to institute and
defend suits and other legal proceedings and to do all other things necessary
for the purpose for which it was constituted.
1.
2.
Where the Registrar is satisfied,

(a)
(5)
if the applicant is a society, by a member duly authorised in

this behalf by such society.
9-C.
Appointment and Powers of the Official Assignee: [Rule 51A]

(1)
Where a society is de-registered under Section 9-B, the Registrar

shall, appoint an official assignee for winding up of the affairs of the
society and fix his remuneration in the manner prescribed.
(2)
On the appointment of an official assignee, the property, assets, effects

and actionable claims or liabilities of the society as on the date of
appointment shall vest in or devolve on the official assignee. He shall
take such steps as he may deem necessary or expedient to prevent
loss or deterioration of, or damage to, such property, assets, effects
and actionable claims.
[Omitted by Act No. 22 of 2001, dated 24.04.2001]

Omitted by Act No. 22 of 2001, dt. 25.4.2001.
(3)
Subject to the control of the Registrar, the official assignee shall
have the power,
(a)
1.
to institute and defend suits and other legal proceedings on behalf of

the society by the name of his office;
Sections 9A, 9B and 9C inserted by Act No.22 of 2001, dt. 25.4.2001.
(b)
to realise the assets of the society, by sale or otherwise;
(c)
to determine, from time to time, the contribution to be made or remaining

to be made and the debts due by the members or past members or by
the estates or nominees, heirs or legal representatives of deceased
members or by any officers or former officers to the society;
(d)
to pay claims against the society including interest upto the date of
winding up according to their respective priorities, if any, in full or
rateably, as the assets of the society may permit, the surplus, if any,
remaining after payment of the claims, being applied in payment of
interest from the date of such order of winding up at a rate fixed by
him but not exceeding the contractual rate in any case;
(f)
to determine by what persons and in what proportion the costs of

liquidation are to be borne;
(g)
to determine whether any person is a member, past member or

nominee of deceased member;
(h)
to give such directions in regard to the collection and distribution of

the assets of the society as may appear to him to be necessary for
winding up the affairs of the society;
(i)
with the previous approval of the prescribed authority, to make any

compromise or arrangement with creditors or persons claiming to be
creditors or having or alleging to have any claim present or future,
whereby the society may be rendered liable; and
(j)
with the previous approval of the prescribed authority, to compromise

all calls or liabilities to any calls and debts and liabilities capable of
resulting in debts and all claims present or future, certain or contingent,
subsisting or alleged to subsist between the society and a contributory
or alleged contributory or other debtor or person apprehending liability
to the society and all questions in any way relating to or affecting the
assets or the winding up of the society on such terms as may be
agreed and take any security for the discharge of any such call, liability,
debt or claim and give a complete discharge in respect thereof.
(5)
shall, on application, be enforced by any Civil Court having local

jurisdiction in the same manner as a decree of such Court.
to investigate all claims against the society, and subject to the

provisions of this Act, to decide questions of priority arising between
claimants;
(e)
(4)
Any sum ordered under this section to be recovered as a contribution

to the assets of a society or as costs of liquidation may be recovered,
on a requisition being made in this behalf by the Registrar to the
Collector in the same manner as arrears of land revenue.
Same as provided in sub-section (4), orders made under this section
10.
(6)
The official assignee shall continue to exercise his powers until the
affairs of the society are completely wound up when he shall make a
report to the Registrar and deposit the records of the society in such
place as the Registrar may direct.
(7)
The winding up proceedings under this section shall be closed within

a period of one year from the date of the order of de-registration of a
society, and the said period may, at the discretion of the Registrar, be
extended from time to time, so however, that the total period does not
exceed two years in the aggregate, and after the expiry of the said
period, it shall be deemed that the winding up proceedings have been
terminated and the Registrar shall pass an order terminating the winding
up proceedings. On the termination of the winding up proceedings,
the official assignee shall make a report to the Registrar.
(8)
Where the affairs of a society have been completely wound up, after
considering the report of the official assignee under sub-section (6) or
sub-section (7), the Registrar shall by order in writing cancel the
registration of the society. The society shall cease to exist as a
corporate body from the date of such order.
Change of name of society: (1) A society may, by an amendment of its

bye-laws, change its name.
(2)
The change of name of a society shall not affect any rights or obligations
of the society, or render defective any legal proceedings by or against
it ; and any legal proceedings which might have been continued or
commenced by or against the society by its former name may be
continued or commenced by its new name.
11.
Change of liability: [Rule 7,8] Subject to the provisions of this Act and
the rules, the society may, by a resolution, decide to amend its bye-laws to
change the form or extent of its liability.
12.
Transfer of assets and liabilities, division, amalgamation and

conversion of a society: [Rule 7,8]
(1) A society may, 1[xxx] by a resolution decide to
1.
(a)
transfer its assets and liabilities in whole or in part to any other society
which agrees to such transfer by a resolution ; or
(b)
divide itself into two or more societies ; or
The words with the previous approval of the Registrar, and omitted by Act No.22
of 2001, dt. 25.4.2001.
(c)
convert itself into a society of a class different from one to which it

belongs.
any other reason, or ceased to undertake its operations, or cannot

undertake its operations in a viable manner; or
(2)
Any two or more societies may, 1[xxx] by a resolution, decide to

amalgamate themselves and form a new society.
(iii) being in marketing, trading, commercial or any other sector has ceased
to undertake its operations, or cannot undertake its operations in a viable
manner;
[Provided that where a society under sub-section (1) is a member of

two or more societies under sub-section (2) are members of a federal
society or in receipt of assistance from a financing bank, such society
or societies shall obtain prior consent of the federal society or financing
bank for any resolution under sub-section (1) or sub-section (2) as the
case may be ;]
and it is necessary in public interest to transfer its assets or assets and

liabilities, in whole or in part, to any other person, he may make an order
to that effect.
(2) (i)
The Registrar shall, before forming the opinion and making the order under
sub-section (1) give an opportunity to the society by calling upon it by
notice in writing in such manner as may be prescribed to state its
objections or make its representations, if any, and consider the objections
or representations, if any, so stated or made.
(ii)
It shall be the responsibility of the society to place the notice received

from the Registrar before the general body convened for the purpose and
communicate its objections or representations, if any, to the Registrar
within a period of four weeks from the date of receipt of the notice from
him:
[(3) Every resolution of a society under sub-section (1) or sub-section

(2) shall be passed at the general meeting by 4[a majority of not less
than two-thirds of members present and voting, and such resolution
shall contain all particulars of the transfer, division, amalgamation or
conversion as the case may be.
5
[12-A.
Special provisions in respect of certain Societies:
(1) Notwithstanding anything contained in this Act or the rules made thereunder
or the bye-laws of the societies concerned or in any other law for the time
being in force, where, in the opinion of the Registrar, a society,
1.
2.
3.
4.
5.
(a)
in which majority of the shares are held, or
(b)
to which loan exceeding fifty percent of the total loan borrowed is advanced,
or
(c)
in which liabilities by way of guarantee for borrowing including working

capital borrowing exceeding fifty percent of the total borrowings are
undertaken, by the Government or one or more Government Companies
or one or more corporations owned or controlled by the Government, or a
society in which majority of shares are held by one or more of the aforesaid
persons or any combination thereof,
(i)
has become a sick co-operative society and there is no possibility to

rehabilitate it; or
(ii)
being in processing, manufacturing or other industrial sector, has its unit

or units lying incomplete or idle or under utilised for want of funds or for
The words with the previous approval of the Registrar, and omitted by Act No.22
of 2001, dt. 25.4.2001.
Added by Ibid.
Subs. by Ibid.
Subs. for a majority of not less than two-thirds of the total members by Act No. 6
of 2005, w.e.f. 31.1.2005.
Provided that the Registrar may receive the objections or representations,

if any, from the society after the said period of four weeks but not later
than five weeks from the date aforesaid, if he is satisfied that the society
was prevented by sufficient cause from stating its objections or making
its representations, if any, in time.
(3)
Where the Registrar has made an order under sub-section (1), he may
appoint the Implementation Secretariat or any other committee, consultant
or adviser having the requisite expertise or experience to assist and advise
him for the purpose of,
(i)
assessing the value of the assets or the assets and liabilities, in whole or
in part, of the society;
(ii)
formulating terms and conditions for transfer of assets or assets and

liabilities, in whole or in part, of the society;
(iii) calling for tenders or offers for the assets or assets and liabilities, in
whole or in part, to obtain the best possible offer;
(iv)
evaluating the offers received and identifying the best offer;
(v)
finalising sale agreement and other documents relating to the transfer;
(vi)
receiving the proceeds from the sale;
(vii) applying the proceeds towards discharge of the liabilities of the society
as per the priorities set out in sub-section (9);
(viii) providing such other service or assistance as the Registrar may think it
necessary; and
(ix) advising and assisting generally on matters relating to employees, creditors
and other matters connected with the sale.
(4)
(5)
Where the best offer for the assets or assets and liabilities, in whole or in
part, of the society concerned is identified in the manner prescribed, the
Registrar shall, before approving the best offer and the terms and conditions
of transfer thereof, consult the Government and the financing bank, if any,
to which such society is indebted.
Where the best offer is approved, the Registrar may make an order directing
that the Committee of the society concerned shall stand dissolved from
the date specified in the order and that the assets or assets and liabilities,
in whole or in part, of the society shall be transferred to the person
submitting the best offer on fulfillment of such terms and conditions including
payment of the purchase price as may be specified in the order in the
manner prescribed.
(6) (i) The Registrar shall, before making the order under sub-section (5),
give an opportunity to the society by calling upon it by notice in writing in
such manner as may be prescribed to state its objections or make its
representations, if any, and consider the objections or representations, if
any, so stated or made.
(ii) It shall be the responsibility of the society to place the notice received
from the Registrar before the general body convened for the purpose and
communicate its objections or representations, if any, to the Registrar
within a period of four weeks from the date of receipt of the notice from
him:
Provided that the Registrar may receive the objections or representations,
if any, from the society after the said period of four weeks but not later
than five weeks from the date aforesaid, if he is satisfied that the society
was prevented by sufficient cause from stating its objections or making
its representations, if any, in time.
(7)
(8)
On the Registrar making an order under sub-section (5) and on such

order being notified in the Andhra Pradesh Gazette, the Committee of the
society shall stand dissolved and all members of the Committee including
the President and the Vice President, if any, shall vacate their respective
office from the date specified in the order. The Registrar shall simultaneously
appoint a person or persons, wherever necessary, to manage the affairs
of such society till it is dissolved.
The person or persons appointed by the Registrar under sub-section (7)
shall transfer the assets or assets and liabilities, in whole or in part, of the
society concerned to the person submitting the best offer in the manner
specified in the order.
(9)
The proceeds realised from the transfer of assets or assets and liabilities,
in whole or in part, of the society concerned, shall be applied in discharge
of the liabilities of such society in the following order of priority, namely:
(i) all expenses incurred for preservation and protection of the assets;
(ii) (a) dues payable to workmen and employees;
b) debts payable to secured creditors according to their rights and
priorities inter se;
(c) dues payable to provident fund or other authorities which are protected
under a statute by a charge on the assets;
(iii) debts payable to ordinary creditors;
(iv) share capital contributed by the members of the society:
Provided that the cases covered under Category (i) shall have precedence
over all other Categories, Category (ii) shall have precedence over
Categories (iii) and (iv) and Category (iii) shall have precedence over
Category (iv):
Provided further that the debts specified in each of the Categories shall
rank equally and be paid in full, but in the event of the amount being
insufficient to meet such debts, they shall abate in equal proportions and
be paid accordingly:
Provided also that the question of discharging any liability with regard to a
debt specified in a lower Category shall arise only if a surplus fund is left
after meeting all the liabilities specified in the immediately higher Category.
(10) When the assets and liabilities of the society concerned are transferred,
or when the assets of the society are transferred and the realisations
therefrom applied towards discharge of its liabilities, on the making of an
order by the Registrar, the registration of such society shall stand cancelled
and the society shall stand dissolved from the date specified in the order.
(11) Notwithstanding anything contained in other provisions of this Act or any
other law, or any contract or any other instrument for the time being in
force, the provisions of the order or orders of the Registrar under this
section shall be binding on the society concerned and its members.
(12) No suit or other legal proceeding shall be instituted or maintained or
continued in any civil court, tribunal or other authority in respect of any
order made under this section.
(13) It shall be competent for the Government to make rules and to give such
directions as they deem fit to the Registrar to carry out the provisions of
this section,
it shall give notice thereof in the manner prescribed together with a copy
of the resolution to all its members and creditors and notwithstanding any
bye-law or contract to the contrary, any member or creditor shall, during a
period of one month from the date of service of the notice upon him, have
the option of withdrawing his shares, deposits or loans, as the case may
be.
Explanation: For the purpose of this section,(a)
sick co-operative society means a co-operative society which has,(i) the accumulated losses in any financial year equal to fifty
percent
or more of its average net worth during four years immediately preceding
such financial year; or (ii) fail to repay its debts within any three consecutive
quarters on demand made in writing for its repayment by a creditor or
creditors of such society;
(b)
net worth means the sum total of the paid up capital and free reserves
after deducting the provisions or expenses as may be prescribed.
(c)
free reserves means all reserves created out of the profits and share
premium account but does not include reserve created out of revaluation
of assets, write back of depreciation provisions and amalgamation;
(d)
debt means any liability (inclusive of interest), which is due and payable
by a society, in cash or otherwise, whether secured or unsecured, or
whether payable under a decree or order of any Civil Court or otherwise
and legally recoverable from such society.
(e)
the expression cannot undertake its operations in a viable manner shall

mean the level of operations of the society in any financial year during four
financial years immediately preceding the financial year in which the issue
is being considered, is such that the income generated therefrom is not
adequate to meet even the operating and establishment costs, current
liabilities and to service the loans and working capital borrowings availed
by it.
(f)
person includes an individual, partnership, trust, company, corporation,

co-operative society, an association of persons or a body of individuals,
whether incorporated or not, and every artificial juridical persons, not falling
within any of the preceding categories;
(g)
Implementation Secretariat means the implementation Secretariat

established in the Department of Public Enterprises by the State
Government in G.O.Ms.No-150, General Administration (PE-II) Department,
dated 30th April, 1998.
(h)
best offer means the offer received that best satisfies the criteria specified
in the call for tenders or offers.
13.
Exercise of option by members and creditors: [Rule 7,8]

(1)
Where a society has passed a resolution under Section 11 or Section 12,
(2)
Any member or creditor who does not exercise his option within the period
specified in sub-section (1) shall be deemed to have assented to the
resolution.
(3)
A resolution passed by a society under Section 11 or Section 12 shall not

take effect until:
(a) all the members or creditors have assented, or deemed to have
assented, to the resolution under sub-section (1) or sub-section (2) of this
section; and
(b) all claims of the members and creditors who have exercised the option
referred to under sub-section (1) within the period specified therein have
been met in full or otherwise satisfied; and
(c)
(i) in the case of change of liability or conversion, amendment of the byelaws of the societies concerned is registered ;
1
[(ii) in the case of transfer of assets and liabilities in whole or in part, the
consent of the financing bank or federal society as the case may be, if
applicable is obtained; or.
(iii) in the case of division or amalgamation, the certificate of registration
of the societies or the society, as the case may be, is issued.
14.
Effect of transfer, division and amalgamation: (1) Not-withstanding

anything in any other law for the time being in force, where a resolution
passed by a society under Section 12 involves a decision for the transfer of
any assets and liabilities the resolution shall, when it takes effect, be a
sufficient conveyance to vest the assets and liabilities in the transferee without
any further assurance.
(2)
The registration of a society shall stand cancelled and the society shall be
deemed to have been dissolved and shall cease to exist as a corporate
body
(a)
when the whole of the assets and liabilities of such society are transferred to
another society ; or
1.
Subs. by Act No. 22 of 2001, dt. 25.4.2001.
(b)
when such society divides itself into two or more societies.
(3)
Where two or more societies are amalgamated into a new society, the
registration of the societies so amalgamated shall stand cancelled and they
shall be deemed to have been dissolved and shall cease to exist as corporate
bodies.
15.
[Omitted by the Act No. 22 of 2001 dated 25-04-2001]
[15-A. Identification of viability of societies and consequences thereof:

[Rule 11A, 11B]
Notwithstanding anything in this Act or the rules made thereunder or the

bye-laws of the society concerned, if the Registrar is of the opinion that 4[in
respect of a society or societies in receipt of State aid as specified under
Section 43 of the Act] it is necessary to amalgamate or merge any society
with any other such society or to divide and restrict or transfer the area of
operation of a society or to liquidate a society for any of the following purposes,
namely:
[(1)
(a)
for ensuring economic viability of any or all the societies concerned; or
(b)
for avoiding overlapping or conflict of jurisdictions of societies in any area; or
(c)
for securing proper management of any society ; or
(d)
in the interest of the co-operative movement in general and of co-operative

credit structure in particular in the State taken as a whole ; or
(e)
for any other reason in the public interest,

he may identify the viable and non-viable societies which may be retained or
divided with consequential restriction of the area of operation or the transfer
of such area or amalgamated or liquidated, as the case may be, and may by
a notification to be published in the prescribed manner, specify the area of
operation of each such society or societies to be retained, divided or
amalgamated with any other society indicated in the said notification and
invite objections or suggestions from the societies or any members,
depositors, creditors, employees or other persons concerned with the affairs
of each such society to be received within twenty-one days from the date of
publication of the notification.
Explanation: For the purpose of this section,
(i)
the term Registrar means the person on whom the powers of the Registrar
under this section are conferred under clause (n) of Section 2.
(ii)
any society may convene the general body meeting within seven days from
the date of publication of the notification.
1.
2.
3.
4.

Subs. by Act No. 6 of 1977, which was earlier Inserted by Act No. 19 of 1976.
Subs. by Act No. 1 of 1987.
Inserted by Act No. 22 of 2001, dt. 25.4.2001.
(2)
The Registrar may, after having considered the matter in the light of any
suggestions or objections which may be received by him within the period
specified in sub-section (1) and after making if necessary, such modification
in the proposal as he may deem fit, make an order and publish it in the
prescribed manner ;
(3)
On making such an order:
(i)
the societies affected by the amalgamation shall be deemed to have been

amalgamated with the society or societies with which each one is
amalgamated ;
(ii)
the registration of every amalgamated or divided society shall stand cancelled

whereupon such society shall cease to exist as a corporate body;
(iii)
the area added to the area of operation of the society shall be deemed to
have been transferred to such society to which it is added ;
(iv)
the assets of such amalgamated or divided society shall stand transferred

to and its liabilities shall devolve on, the society with which it is amalgamated
and all immovable properties located in the area transferred shall be deemed
to be transferred to the society to which the area is transferred;
(v)
every member of such amalgamated or divided society and residing in the

area so transferred shall be deemed to have been transferred together with
his loans, share capital deposits to the society with which it is amalgamated
or to which the area is transferred and he shall have the same rights, privileges
and liabilities which he has had in the amalgamated or divided society ;
(vi)
the Committee of the amalgamated or divided society shall stand dissolved

and thereupon, the Registrar shall nominate a Committee or appoint a person
or persons, wherever necessary to manage the affairs of such society for a
period 1[not exceeding three months] and arrange for the conduct of elections
before the expiry of the term ;
(vii)
it shall be competent for the Registrar to allot, by order, employees of such

societies which are amalgamated or divided to any society or societies ;
and
(viii)
notwithstanding anything in this Act or in any other law, or in any contract,

award or any other instrument for the time being in force, the provisions of
the order of the Registrar under sub-sections (2) and (3) shall be binding on
all societies and their members, depositors, creditors, employees and other
persons having any rights, assets or liabilities in relation to all or any of the
concerned societies ;
1.
Subs for the words not exceeding six months by Act No. 22 of 2001, dt. 25.4.2001.
(4)
The Registrar may, at any time before the expiration of the period specified
in clause (vi) of sub-section (3) arrange for the calling of a general meeting
for the election of a new committee in such manner as may be prescribed for
every such viable society .1[xxx]
(5)
(6)
[Omitted by the Act No. 21 of 1985 dated 22.4.1985]
(7)
Notwithstanding anything in the Transfer of Property Act, 1882 (Central Act

4 of 1882) or the Registration Act, 1908 (Central Act 16 of 1908) an order
issued under this section shall be sufficient conveyance to transfer the assets
and liabilities of the society or societies covered by any order passed under
sub-section (2) of this section.
(8)
No suit or legal proceeding shall be instituted or maintained or continued in

any Civil Court in respect of any order made under this section.
16.
Amendment of bye-laws of a society: [Rule 10, 11]
(1)
No amendment of any bye-law of a society shall be valid unless 4[the

resolution for such amendment is passed at its General meeting 5[by a
majority of not less than two-thirds of the members present and voting] and]
such amendment has been registered under this Act. Where such an
amendment is not expressed to come into operation on a particular day,
then it shall come into force on the day on which it is registered.
(2)
Every proposal for such amendment shall be forwarded to the Registrar who
shall, if he is satisfied that the proposed amendment fulfils the conditions
specified in sub-section (1) of Section 7, register the amendment within a
period of thirty days from the date of receipt of such proposal;
Provided that the Government may, for sufficient cause which shall be recorded
in writing, extend the said period for a further period of 6[thirty days.]
(3)
(4)
The Registrar shall forward to the society a copy of the registered amendment
together with a certificate signed and sealed by him, and such certificate
shall be conclusive evidence that the amendment has been duly registered.
Where the Registrar is not so satisfied, he shall communicate by registered
post the order of refusal together with the reasons therefor, to the society
within the period specified in sub-section (2).
7
1.
2.
3.
4.
5.
6.
7.
period specified in sub-section (2) it shall be deemed that the Registrar has
not registered the amendment as on the last date of the period specified in
sub-section (2).]
(5)
17.
(1)
Partnership of societies:
1
[Any two or more societies may, by a resolution passed 2[by a majority of

not less than two-thirds of the members present and voting]] at a general
meeting of each such society enter into a contract of a partnership for carrying
out any specific business permissible under the bye-laws on such terms
and conditions as may be agreed upon by such societies.
[Provided that where such societies are members of a federal society or are
in receipt of assistance from a financing bank or State aid as specified in
Section 43 of the Act, they shall obtain the prior consent of the federal society
or the financing bank or the Registrar, as the case may be.]
(2)
No such resolution shall be passed by a society unless ten clear days

written notice of the resolution and the date of the meeting has been given to
each member of the society.
(3)
The provisions of the Indian Partnership Act, 1932 shall not apply to such
contracts of partnership.
18.
Classification: [Rule 12]

The Registrar shall, in accordance with the rules, classify societies with
reference to their objects, area of operation, membership or any other matter
[If no order of refusal is communicated within a week after the expiry of the
Omitted by A.P. Act No. 1 of 1987.

Omitted by Act No. 21 of 1985, w.e.f. 22.4.1985.
Subs. for by a majority of the total members by Act No. 6 of 2005, w.e.f. 31.1.2005.
Subs. by A.P. Act No. 21 of 1985, w.e.f. 22.4.1985.
If in the opinion of the Registrar, an amendment of the bye-laws of a society

is necessary or desirable in the interest of such society or of the Co-operative
movement, he may, in the manner prescribed, call upon the society to make
any amendment within such time as he may specify. If the society fails to
make such an amendment within the time so specified, the Registrar may,
after giving the society an opportunity of making its representation, register
such amendment and forward the society by registered post a copy of the
amendment together with a certificate signed by him; such a certificate shall
be conclusive evidence that the amendment has been duly registered ; and
such an amendment shall have the same effect as an amendment of any
bye-law made by the society.
1.
2.
3.

Subs. for by a majority of the total members by Act No. 6 of 2005, w.e.f. 31.1.2005.

1
specified in the rules.

CHAPTER III
Members and their Rights and Liabilities
19.
Subject to the provisions of Section 21,
[(a)
an individual who attained majority and is of sound mind and who belongs to
a class of persons, if any, for whom the society is formed as per its bye-laws
and who possesses such qualifications as may be specified in the bye-laws
or as may be prescribed for the concerned class of societies in the interest
of Co-operative movement.]
(b)
[Provided also that the individual who seeks admission into an Agricultural
Credit Society, shall hold agricultural land either as an owner or a tenant in the area
of operation of the said society in such manner as may be prescribed.]
Eligibility for membership: [Rule 13,14,59,12A]
(1)
1
Explanation 3[I] : For the purpose of this sub-section ;

(i)
family means husband, wife, unmarried sons, unmarried daughters and

other dependents in the house-hold ;
(ii)
weaver means any individual not being a master weaver, who attends to
operations of weaving of cloth or fabric or product on the loom whether such
operation is carried on in private dwelling house or any other place and is
dependent on weaving as profession and income thereof.
a society registered, or deemed to be registered, 2[under this Act or the

Andhra Pradesh Mutually Aided Co-operative Societies Act, 1995 (Act No.
30 of 1995)] 3[and which belongs to the class of societies, if any, for which
the society is formed as per its bye-laws:
[Explanation II : For removal of any doubts, it is hereby declared that

Mutually Aided Co-operative Society registered or deemed to be registered
under the Andhra Pradesh Mutually Aided Co-operative Societies Act, 1995
shall be entitled to all the rights and privileges of a member of a society
except voting rights under the provisions of this Act on admission as such
member.]
[Provided that the Co-operative Society registered under the Andhra Pradesh
Mutually Aided Co-operative Societies Act, 1995 which were admitted into
Central, Apex Level Co-operative Societies, shall not be entitled for voting
rights.]
(c)
(2)
Notwithstanding anything in sub-section (1),
(i)
any firm, company or any other body corporate constituted under any law for
the time being in force, or a society registered under the relevant Societies
Registration Act or a local authority or a public trust registered under any
law for the time being in force relating to the registration of such trusts,
which is immediately before the commencement of this Act, a member of a
society deemed to be registered under this Act shall have, subject to the
other provisions of this Act, the right to continue to be such member on and
after such commencement ;
(ii)
the requirements specified in 5[clauses (c) and (cc) in sub-section (2) of

Section 6] for individual signing the application for registration of a society
referred to therein, shall also apply to individuals seeking admission as
members of such society after its registration ;
(iii)
any statutory body constituted for the purpose of development of a particular

industry, may become a member of a co-operative marketing or processing
society of growers or workers engaged in such industry;
the Government ;
shall be eligible for admission as a member
5
[Provided that no individual shall be eligible for admission as a member of
any financing bank or federal society :]
6
[Provided further that an individual who was admitted as a member of the

financing bank or federal society and continuing as such on the date of the
commencement of the Andhra Pradesh Co-operative Societies (Amendment) Act,
1985, shall, on the commencement cease to be a member of such bank or society:]
7
[Provided also that a society shall admit an individual or a society referred

to in clauses (a) and (b) above as a member, subject to the condition that the
society is in a position to extend its services to such individual or society.]
1.
2.
3.
4.
5.
6.
7.
Subs. by A.P. Act No. 28 of 1988, w.e.f. 9-5-1988.

Subs. for the words under this Act by A.P. Act No. 6 of 1998, w.e.f. 6-4-1998, pub.
in A.P. Gaz. Pt. IV-B (Ext.) No.6 dt. 16-1-1998.
Added by A.P. Act No. 14 of 1966.
Ins. by A.P. Act 6 of 1998, w.e.f. 6-4-1998, pub. in A.P. Gaz. Pt. IV-B (Ext.) No. 6, dated
16-1-1998.
Ins. by A.P. Act No. 21 of 1985.
[xxx]
1.
2.
3.
4.
5.

Numbered as Explanation I by A.P. Act No. 6 of 1998.
Added by A.P. Act No. 6 of 1998, w.e.f. 6-4-1998.

1
[(iv)
persons who are minors, may, subject to such restrictions or limitations as

may be applicable to a minor under the provisions of any law for the time
being in force, be admitted as members of such class of societies as may
be prescribed ;]
[(2-A) Any person duly qualified for admission as a member under the provisions of
this Act, the rules and the bye-laws, may apply through the Registrar for
membership of such societies and in such forms as may be prescribed and
such person shall be deemed to have been admitted as a member of the
society from the date of receipt of the application in the office of the society.
(2-B) Notwithstanding anything in this Act, the Registrar may either suo motu at
any time or on any application by the society or any aggrieved person made
within fifteen days from the date mentioned in sub-section (2-A) and after
giving an opportunity to the person concerned and recording the reasons
therefor declare such person as not eligible for membership of the society
within thirty days from the date of receipt of the application by the Registrar.]
(3)
[(4)
[(5)
[20.
(1)
1.
2.
3.
4.
5.
6.
7.
[The General body of a society shall not without sufficient cause, refuse
admission to membership to any person duly qualified therefor under the
provisions of this Act and its bye-laws. Where admission is so refused, the
decision, with reasons therefor, shall be communicated by the registered
post to such person within fifteen days of the date of the decision, or within
sixty days from the date of his application for membership, whichever is
earlier :
The name of every person admitted or deemed to have been admitted as a

member of the society shall be entered in such records of the society as
may be prescribed 5[and the member so admitted shall be issued a photo
identity card.]
The name of every associate member admitted or deemed to have been
admitted, shall be entered in a separate register and a photo identity card
shall be issued.]
Associate Member:Notwithstanding anything contained in Section 19, a society may admit any
individual or informal group such as Self Help Group, Rythu Mithra Group,
Non-Governmental Organisation , working for the welfare of farmer community
Subs. by A.P. No. 22 of 2001, dt. 25.4.2001.
Inserted by A.P. Act No. 19 of 1976.
Subs. for the words No society shall by Act No. 22 of 2001, dt. 25.4.2001.
Added by Act No. 6 of 2005, w.e.f. 31.1.2005.
Inserted by Act No. 6 of 2005, w.e.f. 31.1.2005
in the area of operation as associate member but such member shall not be
entitled to vote.
(2)
The associate member shall not be entitled to any share in any form
whatsoever in the profits or assets of the society. Such member shall not
have privileges, rights and liabilities of a member except those specified in
the bye-laws of the society:
Provided that the members without holding any agricultural land in the Agricultural
Credit Societies be treated as associate members.
21.
Disqualification for membership of society: [Rule 21B]
(1)
A person shall be disqualified for being admitted as, and for being, a member,
he -
(a)
is an applicant to be adjudicated, an insolvent or is an undischarged insolvent

; or
(aa) is not eligible for membership under Section 19;] or

(b)
has been sentenced for any offence involving more turpitude, such sentence
not having been reversed and a period of three years has not elapsed from
the date of expiration of the sentence; or
(c)
is a paid employee of the society or of its financing bank or of any society

for which it is the financing bank ; or
(d)
has been expelled from membership under this Act and a period of one year
has not elapsed from the date of such expulsion; 2[or]
[(e)
is carrying on business of such kind as the Registrar may by general or

special order, declare to be a business which is in conflict with the objects
or interests of the society ; 3[or]
[(f)
as such member fails to transact such minimum business or utilise minimum

services or facilities in a year as may be specified- in the bye-laws; or
(g)
fails to attend two consecutive General body meetings in two years without
leave of absence; or
(h)
fails to give information relevant to him to the society as specified in the byelaws.]
(2)
The provisions of clause (b) of sub-section (1) shall not apply to a person
seeking admission to, or to a member of, a society exclusively formed for
the reclamation of such class of persons as may from time to time be notified
by the Government in the Andhra Pradesh Gazette.
1.
2.
3.

Added by A.P. No. 10 of 1970.
The provisions of clause (c) of sub-section (1) shall not apply to a person
seeking admission to, or to a member of
1
a society which has as its principal object the provision of employment to

its members ; or
(ii)
such other society as may be prescribed.]
[(i)
[(3)
Where any person, who is not eligible for being admitted as member has
been admitted as member or where the member who is disqualified to continue
as such under sub-section (I) is continued as member, he shall be removed
by the General body on its own motion or on a representation made to it by
any member of a society or its federal society or its financing bank:
[(h)
has been sentenced to imprisonment for an offence under the Protection of

Civil Rights Act, 1955 ;]
is a Village Administrative Officer or an employee of the State or Central

Government or an employee of any institution receiving aid from the funds of
the State or Central Government or an employee of an undertaking owned
and controlled by the State or Central Government :
[(i)
Provided that this clause shall not apply for being a Member of the committee
of any society formed by and for the benefit of the concerned class of the
employees specified in this clause;
3
[(j)
is convicted by a Criminal Court for an offence involving moral deliquency:
Provided that no member shall be removed under this sub-section unless he

had an opportunity of making a representation against the proposed action. A copy
of the resolution removing the member shall be communicated to such person and
on such communication, he shall be deemed to have ceased to be a member of the
society.
Provided that the disqualification under this clause shall subsist for a period
of five years from the date of conviction or where he is sentenced to
imprisonment while undergoing sentence and for a period of five years from
the date of expiration thereof :
Provided that any delegate of a society sitting on the committee of any other
society, shall cease to be such delegate, if
[21-A. Disqualification for membership of committee: [Rule 24,30]
[(1)] No person shall be eligible for being chosen as, and for being, a member of
the committee, if he
(a)
is such near relative of such paid employee of the society or its financing
bank as may be prescribed ;
(b)
is in default in the payment of any amount due in cash or kind to the society
or any other society for such period as may be prescribed or is a delegate of
a society which is defunct or which is in default as aforesaid:
(c)
is a person against whom any amount due under a decree, decision, award
or order is pending recovery under this Act;
(d)
acquires any interest in any subsisting contract made with or work being
done for the society, except as otherwise prescribed;
(e)
is of unsound mind and stands so declared by competent Court, a deafmute or a leper ;
(f)
is appearing as legal practitioner on behalf of or against the society ;
[(g)
1.
2.
3.
4.
5.
his delegation is withdrawn ;
(ii)
the committee which elected him as the delegate, has been

superseded ;
(iii)
the society of which he is the delegate is defunct or commits

default in the payment of any amount due in cash or kind to
such other society for the period prescribed ; or
(iv)
the affairs of the society of which he is the delegate are wound

up.]
[(i)
[(1A) A person having more than two children shall be disqualified for election
or for continuing as a Member of the Committee :
Provided that the birth within one year from the date of commencement
of the Andhra Pradesh Co-operative Societies (Amendment) Act, 1995
(hereinafter in this Section referred to as the date of such
commencement) of an additional child shall not be taken into
consideration for the purposes of this section ;
is carrying on business of such kind as the Registrar may, by general or

special order, declare to be a business which is in conflict with the objects,
or interests of the Society ;]
Subs. by A.P. No. 14 of 1966.
Subs by Act No. 22 of 2001, dt. 25.4.2001.
Inserted by A.P. No. 14 of 1966.
Renumbered by A.P. Act No. 10 of 1970.
Inserted by A.P. Act No. 10 of 1970
Provided further that a person having more than two children (excluding
the child if any born within one year from the date of such
1.
2.
3.
4.

Inserted by Act No. 5 of 1993.
commencement) shall not be disqualified under this section for so

long as the number of children he had on the date of such
commencement does not increase ;
Provided also that the Government may direct that the disqualification
in this section shall not apply in respect of a person for reasons to be
recorded in writing.
(1 B) A Member of the Legislative Assembly of the State, a Member of either
House of the Parliament, Mayor of a Municipal Corporation, Chairman
of a Municipal Council, elected member or Chairman of Zilla Parishad
or elected member or President of Mandal Parishad or Sarpanch of a
Gram Panchayat shall be eligible to be elected as a Member of the
Committee ; but he shall cease to be a member of the Committee
unless within fifteen days from the date of becoming a member of the
Committee he ceases to be a Member of the Legislative Assembly of
the State or a Member of either House of the Parliament, Mayor of a
Municipal Corporation, Chairman of a Municipal Council, elected
Member or Chairman of a Zilla Parishad or elected member or President
of a Mandal Parishad or Sarpanch of a Gram Panchayat by resignation
or otherwise ; and if a member of the committee is subsequently
elected to any one of the aforesaid offices, he shall cease to be the
member of the committee unless within fifteen days from the date on
which he is elected to any one of such offices he ceases to hold such
office by resignation or otherwise.
1[(2)(a) No person shall, at the same time, be a member of the committee
of more than two societies which under the rules, are classified as
apex societies, or as central societies, or of the committees of more
than apex society and one central society.
(b)
(c)
1.
If any person, on the date of his election of appointment as a member

of the committee, is a member of the committees of two societies as
specified in clause (a) and the committee to which he is elected or
appointed on that date is the committee of any apex society or central
society, then, his election or appointment on the date aforesaid shall
be void.
If any person is, at the commencement of the Andhra Pradesh Cooperative Societies (Amendment) Act, 1970, a member of the
committees of more than two societies of any class or classes specified
in clause (a), then at the expiration of the period of ninety days from
such commencement, he shall cease, to be a member of the
committees of all such societies unless he has, before the expiration
of the said period of ninety days, resigned his membership of the
committees of all but two of such societies.
(d)
Nothing in this sub-section shall apply to an officer of the Government

who is nominated as a member of the committee by the Government
or the Registrar.
[21-AA. Cessation of Membership of Committee:
(1)
(a)
(b)
on an enquiry under this Act he is found guilty of misuse of the property of

the society for his personal gain ;
(c)
he is found responsible for making any appointment to any post in the society
in contravention of the relevant service rules and regulations.
(2)
A member of the Committee found responsible for wilfully or knowingly

sanctioning benami loans 4[or against whom an order of surcharge is issued
under Section 60] shall cease to hold office and shall also be ineligible to be
elected as member of the Committee for a period of six years from the date
of cessation.
(3)
Where a society incurs loss in any Co-operative year as a result of misuse

or misapplication of share capital, the President and the Secretary of such
society shall cease to hold office as such.
[A member of the committee shall cease to hold office forthwith as such, for
the residue of his term of office and he shall also be ineligible for being
chosen as or for being a member of the committee through election or cooption for the subsequent two terms if,-]
[Omitted by the Act of 1987]
Where the Committee fails to prepare and submit or cause to be prepared

and submitted within the period specified in sub-section (3) of Section 50 of
the Annual accounts of the Society to the Chief Auditor, the members of the
Committee shall on the expiration of the period aforesaid cease to hold such
office.]
[(5)
Where the committee of a society fails to place the inquiry report under
Section 51 or Inspection report under Section 52 or Section 53 or Audit
Report or Special Audit Report under Section 50 along with the findings of
the Registrar before the General Body within a period of thirty days from the
date of the receipt of the report by the society, the members of the Committee
shall, on the expiration of the said period, cease to hold such office.
1.
2.
3.
4.
5.
6.
Inserted by A.P. Act No. 21 of 1985

Came into force 3-6-1985 vide Section 1(2) of Act No. 21 of 1985.
[(4)
(6)
Where the committee fails to initiate action for prosecution of any member
or servant of a society who may have incurred criminal liability under the
provisions of this Act or any other law for the time being in force, the members
of the Committee shall cease to hold such office.
votes of not less than 1[two-thirds of the members of the society present and
voting.]
(2)
No member shall be expelled under sub-section (1) without being given an

opportunity of making his representation to the General Body. A copy of the
resolution expelling the member shall be communicated to the member
24.
Members not to exercise rights till payments are made:
[21-B. Cessation of membership and reinstatement:
[(1)] Where a member of the committee absents himself from three consecutive
meetings of the committee, he shall cease to be a member of the committee.
He may, however, be reinstated by the committee in the manner, prescribed
but such reinstatement shall not be made more than once during the term of
the committee.]
[(2)
Where a member of the committee ceases to be such member by reason of

his incurring the disqualification under Clause (b) of sub-section (1) of Section
21-A or where a delegate of a society ceases to be such delegate by reason
of his incurring the disqualification under Item (ii) of the proviso to sub-section
(1) of Section 21-A, he shall not be entitled for being chosen against a
member of the committee on the removal of the said disqualification, unless
a period of one year has elapsed from the date of such cessation.]
21-C
22.
Right of members to services by society and application for redress:
[(l)
Every member on his admission as such member shall be entitled to the

services available to the members of the society and such services shall,
subject to availability, be rendered to him on his application to the committee.]
(2)
If any member is refused any service, or where the decision of the committee
on his application for services is not communicated to him within a period of
thirty days from the date of such application, he may make an application to
the Registrar for redress, within thirty days from the date of receipt of the
decision of refusal, or within sixty days from the date of application to the
society, as the case may be.
No member shall, save as otherwise provided in Section 31, exercise the

rights of a member unless he has made such payment to the society, in
respect of membership or has acquired such interest in the society, as may
be specified in the rules made in this behalf or 2[as may be specified in the
bye-laws].
25.
(1)
Vote and manner of its exercise: [Rule 18]

3
[Subject to such rules as may be made in this behalf, every member] shall
have one vote in the affairs of the society and shall exercise his vote in
person and not by proxy :
4
[Provided that no member of a society belonging to such class of societies

and who failed to transact such minimum business or utilise such minimum
services or facilities as may be prescribed taking into consideration the
nature of business transacted or the services or facilities made available by
the society, shall have the right to stand as a candidate or to vote in any
election to the society.]
[Omitted by the Act No. 10 of 1991]
[(1-A) A member of a society shall be eligible to exercise the right to vote only if he:
(a)
contributes a minimum share capital as may be prescribed.
(b)
[xxx]
[(c)
is a member of the society for a continuous period as may be prescribed.]
(d)
If the Registrar is satisfied that the refusal of any service is unreasonable,

improper or discriminatory, he may after giving the committee an opportunity
of making its representation by order, direct the committee to render the
service.
is not in default in the payment of any amount due in cash or kind to the
society for such period as may be prescribed.
(2)
23.
Expulsion of Members:
1.
(1)
Any member who has acted adversely to the interests of the society may be
expelled upon a resolution of the general body passed as its meeting by the
1.
2.
3.
Inserted by Act No. 14 of 1966, and renumbered by Act No. 10 of 1970.

Inserted by A.P. Act No. 10 of 1970, substituted by Act 26 of 1987 and omitted by
A.P. Act No. 10 of 1991, w.e.f. 5-3-1991.
(3)
4.
2.
3.
4.
5.
6.
7.
8.
[xxx]Every person nominated to the committee by the Government or where

the financing bank is a member, every person representing such financing
bank, shall have one vote :
Subs. for three-fourths of the total members of the society by Act No. 6 of 2005,
w.e.f. 31-1-2005.
Subs. by A.P. Act No. 28 of 1978.
Added by Act No. 26 of 1987.
Ins. by Act No. 22 of 2001, dt. 25.4.2001.
Omitted by Act No. 6 of 2005, w.e.f. 31.1.2005.
Subs. by Act No. 6 of 2005, w.e.f. 31.1.2005.
Provided that no nominee of the Government or the representative of the

financing bank, as the case may be, 1[shall be entitled] to participate in, or
vote at any election.
(3)
In the case of equality of votes, the chairman of the meeting shall have a
second or casting vote.
(4)
26.
the value of the share or interest of the deceased member as ascertained in

the manner prescribed.
(3) A society shall pay all other moneys due to the deceased member from
the society to such nominee, heir or legal representative, as the case may
be, subject to such conditions as may be prescribed.
[xxx]
Restriction on holding of shares:

Where the liability of the
members of a society is limited, no member other than a society or the
Government, shall hold more than such portion of the share capital of the
society, subject to a maximum of one-fifth thereof, as may be prescribed .
3
[xxx]
(4) All transfers and payments made by a society in accordance with the
provisions of this section shall be valid and effectual against any demand
made upon the society by any other person.
29.
Liability of past member and estate of deceased member:
(1)
Subject to the provisions of sub-section (2), the liability of a past member, or

of the estate of a deceased member, for the debts of the society as they
existed,
Provided that the Government may, by notification in the Andhra Pradesh

Gazette, fix in respect of any society or class of societies, a higher maximum
than one-fifth of the share capital.3[xxx]
27.
(a) in the case of a past member, on the date on which he ceased to be a

member ;
Restrictions on transfer of shares or interest: (1) No transfer by a member

of his share or interest in a society shall be valid unless
(a)
the member has held such share or interest for not less than one
co-operative year ; and
(b)
the transfer is made to a member of the society.
(2)
Not with standing anything in Sub - section(1), no member of a financing

bank or federal society shall tranfer his share or interest in such bank or
society to an individual member, his heir or legal representative.
28.
Transfer of interest on death of a member: [Rule 16,17]
(1)
On the death of a member, the society shall transfer his share or interest to
the person or persons nominated in accordance with the rule, or if no person
has been so nominated, to such person as may appear to the committee to
be the heir or legal representative of the deceased member only on such
nominee, heir or legal representative, as the case may be, becoming a member
of the society, subject to such conditions as may be prescribed :
Provided that nothing in this sub-section shall prevent a minor or a person of
unsound mind from acquiring by inheritance or otherwise the share or interest
of a deceased member in a society.
(2)
Notwithstanding anything in sub-section (1), any such nominee, heir, or legal

representative, as the case may be, may require the society to pay to him
1.
2.
3.
Subs. by Ibid.
Omitted by Act No. 21 of 1985 , w.e.f. 22-4-1985.
(b) in the case of a deceased member, on the date of his death; shall continue
for a period of two years from such date.
(2)
Where a society is ordered to be wound up under Section 64, the liability of

a past member who ceased to be a member or of the estate of a deceased
member who died, within two years immediately preceding the date of the
order of winding up, shall continue until completion of the liquidation
proceedings but such liability shall be limited only to the debts of the society
as they existed on the date of cessation of membership or death, as the
case may be.
30.
(v)
amendment to bye-laws ;
CHAPTER IV
(vi)
expulsion of a member ;
Management of Societies
(vii)
approval of the annual budget of income and expenditure ;
(viii)
affiliation of the society to the financing bank or other societies ;1[xxx]
(ix)
Ultimate authority of society: [Rule 21]
(1)(a) Subject to the provisions of this Act, the rules and the bye-laws, the ultimate
authority of a society shall vest in the general body :
[Provided that where a delegate is not elected under this item the President
shall be the delegate to the Financing Bank or other society until a delegate
is elected ;
Provided that nothing in this clause shall affect the exercise by the committee
or any officer of a society or any power conferred on such committee or
officer by the Act, the rules or the bye-laws.
(b)
Notwithstanding anything in clause (a), where the area of operation of a

society is not less than such area as may be prescribed, or where the
society consists of not less than such number of members as may be
prescribed, the society-may and if so directed by the Registrar shall provide
in its bye-laws for the Constitution of smaller general body designated as
the representative general body consisting of such number of members of
the society as may be specified in and elected in accordance with, the
rules, to exercise all or any of the powers of the general body except the
power to conduct elections of members of the committee as may be specified
in the bye-laws ; and thereupon any reference in this Act to the general body
meeting thereof shall be construed as a reference to the representative general
body or its meetings :
Provided that the representative general body shall not alter any provision in
the bye-laws relating to its Constitution or powers.
(c)
(2)
The exercise of any power by representative general body shall be subject

to such restrictions and conditions as may be specified in the rules or the
bye-laws,
Subject to the other provisions of this Act, the following matters shall be
dealt with by the 1[General Body in the manner prescribed]-
(i)
election and removal of members of the committee and members
(ii)
annual report to the Registrar ;
(iii)
consideration of the audit report and the annual service ;
(iv)
disposal of the net profits ;
1.
[election of delegates to the financing Bank or other societies]
Provided further that where a President is elected by direct election, he shall

represent the society as a delegate to the Financing Bank or other Societies.]
4
[(x)
review of the loans and advances sanctioned to or the business done with
the society by the members of the committee or their such near relatives as
may be prescribed, and report to the Registrar about any default in the
recovery of the amounts due to the society.]
Provided that the general body may delegate, by a resolution, to the committee
its powers in respect of 5[items (viii) and (ix)] or to withdraw by a resolution
such powers at any time.
[(xi) appointment of two internal auditors from among its members other than the
members of the committee ;
(xii)
7
consideration of the report of the internal auditors appointed by it.]
[(xiii) contribution to Cooperative Education Fund;
(xiv)
consideration of report of inquiry under Section 51 or Inspection under Section

52 or under Section 53 or Special report of Audit under Section 50;
(xv)
decision on bad debts considered irrecoverable;
(xvi)
management of deficits in stocks or cash;
(xvii) appointment of members of supervisory council, entrustment of duties to the

supervisory council and consideration of its reports;
1.
2.
3.
4.
5.
6.
7.

Omitted by A.P. Act No. 28 of 1978 and re-inserted by Act No. 5 of 1993.
Inserted byAct No. 21 of 1985.
(xviii) decision on transfer of assets and liabilities, on division or amalgamation;
(xix) review of attendance of Committee members;
(xx)
[(b) On the Committee of such society or class of societies 3[other than the
societies formed exclusively for the persons belonging to the Scheduled
Castes, Scheduled Tribes or Backward Classes] as may be notified by the
Government, such number of seats as may be specified by them shall be
reserved for the members of the Weaker Section :
review of membership;
(xxi) review of the report on the disqualification of the members and the committee
members;
(xxii) review of all overdue loans and defaulters;
[Provided that in the case of such classes of Societies as may be prescribed,

two seats shall be reserved for women in the manner prescribed and such
reservation may be made in the reserved and unreserved categories also ;]
(xxiii) approval of the staffing pattern, pay and other allowances of the employees
of the society and contingencies, subject to the availability of administrative
and contingent fund and approval of the Registrar.
[Provided further that in the case of a Primary Agricultural Co-operative Credit

Society, a Fanners Service Co-operative Society 6[xxx\ a Co-operative Farming
Society, 6[xxx]a Co-operative Central Bank and a District Co-operative
Marketing Society, not more than one-half of the total number of seats to be
filled by elected members on the committee thereof shall be reserved 7[to be
filled by members of the Scheduled Castes, Scheduled Tribes 8[Backward
Classes and Women in such proportion as may be prescribed:]]
[30-A. Constitution of supervisory council: [Rule 21A]

The General Body of every society may constitute a supervisory council to
ensure that the affairs of the society are conducted in accordance with the
principles of Cooperation, provisions of the Act, rules, bye laws and resolutions
of the General Body. The supervisory council shall consist of three members
from the General Body other than the members of the Managing Committee
and such other members as may be prescribed. The Supervisory council
shall aid and assist the General Body in general and exercise such powers
and functions as may be prescribed.]
31.
9 10
[ [Provided also that] where no such members are elected in the proportion
specified in the foregoing proviso the persons elected as members of the
committee shall choose in the prescribed manner the members required to
fill up the short fall in the said proportion, from amongst the persons belonging
to the Scheduled Castes, Schedules Tribes, 11[Backward Classes or Women],
as the case may be, who are members of the general body of the society :
Constitution of committees: [Rule 22,22A,22B,22C,22D,25]

2
[(l) (a)] The general body of a society shall constitute a committee in

accordance with the bye-laws and entrust the management of the affairs of
the society to such committee :
Provided also that in a committee where the number of members elected as

aforesaid was fallen short of the said proportion, in respect of any of the
categories of the weaker sections, namely, Scheduled Castes, Scheduled
Tribes or Backward Classes, the persons elected as members of the
Committee shall choose in the prescribed manner the members required to
[xxx]
[Provided that in the case of a society registered after the commencement

of the Andhra Pradesh Co-operative Societies (Second Amendment) Act,
2001 the persons who have signed the application for the registration of the
society shall conduct the affairs of the society for a period of one month from
the date of registration and shall cease to conduct the affairs of the society
after duly constituting a committee as per the provisions of the Act thereafter:
[Provided further] that where the bye-laws so provide, the Government or

the Registrar may nominate all or any of the members of the committee for
such period as may be specified therein ;
1.
2.
3.
4.
5.

Re-numbered by A.P. Act No. 19 of 1976.
Proviso omitted by Act No. 1 of 1987.
[xxx]
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
Omitted by A.P. Act No. 4 of 1995, w.e.f. 2-1-1995.

Insaerted by A.P. Act 4 of 1995.
Substituted for Provied that by Act 4 of 1995.
Subs. for and Backward Classes in the proportion of 2:1:2 by A.P. Act No. 4 of
1995, w.e.f. 2-1-1995.
Subs. for Provided further that by Act 4 of 1995 w.e.f. 2-1-1995.
Subs. for or Backward Classes by Ibid.
fill up the short fall in the said proportion, from amongst the persons belonging
to the other categories of weaker sections in such order of priority as may
be prescribed.
Explanation: For the purposes of this clause
(1)
the expression members of the weaker sections shall mean the persons
belonging to the Scheduled Castes, Scheduled Tribes, 1[xxx]Backward
Classes and such other socially and economically backward sections of the
community as the Government may, from time to time, notify in this behalf ;
(2)
in the determination of one half of the total number of members any fraction
arrived at shall be counted as one.]
[(c)
(d)
Two women members shall be nominated by the Registrar to the Committee

of such class of societies and in such manner as may be prescribed from
among the women members belonging to Self-Help Groups, Rythu Mithra
Groups and Non-Governmental organizations. Such nominated women
members, notwithstanding anything contained in this Act, may take part in
proceedings of the meetings of the committee but shall not have the right to
vote.
One member belonging to minority community, shall be nominated by the
Registrar to the Committee of such class of societies and in such manner
as may be prescribed from among the members belonging to minority
communities. Such nominated members, notwithstanding anything contained
in this Act, may take part in proceedings of the meetings of the committee
but shall not have the right to vote.]
[(1-A) Notwithstanding anything in this Act or in the bye-laws the societies referred
to in Clause (b) of sub-section (1), the Government may, for the purpose of
effective implementation of the reservation specified in Clause(b), by rules
made in this behalf, provide for the constitution of, and election to, the
committees of such societies and all other matters relating thereto, including
the division of constituencies, allocation of seats and the choice of persons
belonging to weaker sections of the society as members of the committee
of any central society from amongst the members of the committees of the
societies affiliated to such central society, by the members of the central
society in cases where no such person is a member of the general body of
such central society.]
1.
2.
3.
AOmmitted by A.P. Act No. 28 of 1978.


1
[(2)2[(a) Save as otherwise provided in this Act, the term of office of the committee
or any of its members or of the President elected in accordance with the
provisions of sub-section (5) shall be five years from the date of election of
the members of the committee :
Provided that the term of office of five years specified in this clause shall be
applicable only to a committee or its members or the President elected in
any ordinary election conducted after the commencement of the Andhra
Pradesh Co-operative Societies (Second Amendment) Act, 1995 and the
term of office of any committee or its members or the President holding
office at such commencement shall be the same for which they were elected
under the law in force when they were elected.
(b)
[(c)
It shall be the duty of the Registrar to hold elections to the 3[office of the
members of the committee of a society which received State aid as specified
in Section 43 of the Act before the expiry of their term.
In respect of other societies it shall be the responsibility of the incumbent
committee of such society to hold elections to the office of the members of
the committee in the manner specified in the byelaws before the expiry of
the term:
Provided that where the committee of a society requests the Registrar to
hold elections to the office of the members of the committee, the Registrar
shall hold elections to the office of the members of the committee in the
manner prescribed on payment of costs in advance.
[(3) (a) In the case of the committee of Co-operative Central Bank, a District
Marketing Society, a District Co-operative Wholesale Store, a Centrally
sponsored Consumer Co-operative Stores, an apex society and a society
formed for a sugar factory or for a spinning mill, 6[such officer of the cooperative department, not below the rank of a Deputy Registrar, as may be
authorised by the Registrar in this behalf shall be the election officer and the
election of the members of the committee shall be in such manner as may
be prescribed.
(b)
In any other case, the election officer and the manner of election of the
members of the committee shall be such as may be prescribed;
1.
2.
3.
4.
5.
6.

Provided that where a requisition signed by not less than one-fifth of the total
number of members is received by the Registrar to appoint the election
officer to conduct the election, the Registrar shall appoint the election officer
to conduct the election.]
(7)
sanction expenditure which is necessary for the business of the society

subject to the provisions of annual budget;
(8)
conduct elections in the manner specified in the bye laws to the office of the
members of the Committee before the expiry of the term;
[(4)(a) For the purpose of electing members to its committee, a society may
provide in its bye-laws, for the division of the area of operation of a society
into territorial constituencies, or the membership of the society into electoral
groups on any other basis, for the number or proportion of members who
may be elected to represent each such territorial constituency or electoral
group on the committee, and for the manner of election of such
representatives.
(9)
conduct general meetings as prescribed in the Act;
(10)
cause the audit of the accounts of the society within the time prescribed and
place the audit report before the General body;
(11)
decide matters connected with the day to day management of the society;
(12)
fix the staffing pattern, qualifications, pay scales and other allowances to the
employees of the society, subject to. The availability of the administrative
and contingent fond and approval of the General body and Registrar;
(13)
place the reports of inquiry under Section 51 or inspection under Section 52

or under Section 53 or special audit report under Section 50 before the General
Body within the time prescribed;
(14)
rectify the defects noted in the reports of audit under Section 50 or inquiry
under Section 51 or inspection under Section 52 or under Section 53;
(15)
suspension of any officer or servant of the society under Section 59;
(16)
initiate action for prosecution of any person who may have incurred criminal
liability under the provisions of this Act or any other law for the time being in
force;
(17)
prepare the list of defaulters and publish the same as prescribed and place
before the General Body;
(18)
review all outstanding loans and ensure coverage of legal action on all overdue
loans and advances;
(19)
give information on the affairs of the society to the supervisory council, the
Registrar, financing bank and the federal society to which the society is
affiliated;
(20)
place the report on the loans sanctioned to and the business done by the
members of the committee or their near relatives with the society, defaulters
thereof and action to recover them before the General Body;
(21)
place annual report, annual financial statement, annual plan and budget before
the General Body;
(22)
ensure cooperative education of the members, officers and the servants of

the society;
(23)
prepare and place before the general body, information or reports or statements
relating to:-
(b)
2
[(5)
In the absence of such bye-laws, the society may elect members to its
committee from among all the members of the society.]
In the case of such classes of Co-operative Societies as may be prescribed,
the President shall, 3[subject to the provisions of Section 21-A, be elected
by the members of the committee] from among themselves in the manner
prescribed. The President elected under this sub-section shall be an exofficio member of the committee.]
[31-A. Powers and functions of the committee: [Rule 28,29]

The committee of a society shall, subject to the provisions of the Act, rules,
bye laws and resolutions of the General body, exercise the following powers
and functions, namely:
[(1)
admit the members to General Body ;
(2)
allot shares to the members and transfer of shares to General Body;
(3)
recommend removal of the members disqualified under Section 21;
(4)
recommend removal of any of the committee members disqualified under

Sections 21-A, 21-AA, 21-B and reinstatement of a Committee member who
ceased to be such member of the committee under Section 21-B and place
the reports before the General Body;
(5)
raise funds in the form of loans or deposits and invest them;
(6)
provide services or facilities including sanction of loans and advances to the

members on a specific recommendation of the chief executive officer on the
basis of the date of admission of such members;
1.
2.
3.
4.

Added by Act No. 1 of 1987, and omitted by A.P. Act No. 10 of 1991, w.e.f. 5.3.1991.
Again Added by A.P. Act No. 4 of 1995 w.e.f. 2-1-1995.
(a) disposal of properties;
(b) deficits in cash or stocks;
three months. If the President fails to discharge that duty with the result that
no meeting is held, within such period of three months or within one month
following such period, he shall with effect from the date of expiration of one
month aforesaid cease to be the President :
(c) proposals for appropriation of net profits including creation of reserves

and other funds;
(d) write off bad debts;
Provided that it shall also be the duty of the President to call such meetings
within fifteen days of the date of receipt of requisition in writing in that behalf
from any of the requisitionists specified in sub-section (2).
(e) removal of membership;

(f) contribution to cooperative education fund and administrative and contingent
fund;
(4)
(g) expulsion of member who has acted adversely to the interests of the
society;
(h) affiliation of the society to the financing bank or other societies;
(i) elections of delegates to the financing bank or other societies;
(j) appointment of supervisory council and internal auditors and consideration
of their reports and follow up action.
32.
General meetings and committee meetings:

[Rule 23, 23A, 23B, 23AA, 26]
The committee may, at any time, call not less than two general meetings of
a society in a co-operative year:
[(1)
Provided that one meeting shall be held in each half year.]

(1-A) If the general meeting is not convened in accordance with the provisions of
sub-section (1), the members of the Committee shall cease to hold office on
the day next after the 1st day on which the general meeting should have
been held, and it shall be competent for the Registrar, notwithstanding
anything in the bye-laws, to call such general meeting in such manner as
may be prescribed.]
(2)
The committee shall call a general meeting of the society within thirty days
of the date of receipt of a requisition in writing from
(i)
such number of members or proportion of the total number of members, as

may be specified in the bye-laws ;
(ii)
the financing bank to which the society is indebted ;
(iii)
a federal society to which the society is affiliated ; or (iv) the Registrar.
It shall be the duty of the President of the society to call the meetings of the
committee so that atleast one meeting of the committee is held in every
1.
2.

[(3)
The requisition referred to in sub-section (2) or sub-section (3) shall specify

the purpose for which the meeting is to be called, and shall be signed by the
requisitionists and delivered in person or by registered post at the registered
address of the society.
(5)(a) If for any reason, a meeting is not called in accordance with the requisition
delivered under sub-section (4), or if, in the opinion of the Registrar there is
no committee or officer competent under this Act, the rules or the bye-laws
to call a meeting, or if there be a dispute regarding the competence of the
committee to function, then notwithstanding anything in the bye-laws of the
society, the Registrar shall have the power to call such meeting in the manner
prescribed, and to determine the time for such meeting and the subjects to
be considered thereat. The Registrar or a person authorised by him in writing
in this behalf shall preside at such meeting, but he shall not be entitled to
vote.
(b)(i) If, at any general meeting of the society called by the Registrar himself
under clause (a), otherwise than in pursuance of the requisition, there is no
quorum, the meeting shall stand adjourned to such other date and time as
the Registrar may determine.
(ii)
If at the adjourned meeting also there is no quorum for holding the meeting,
the members present shall constitute the quorum.
(c)
If at any general meeting of the society called by the Registrar himself under
clause (a) in pursuance of the requisition, there is no quorum, the requisition
shall lapse.
(6)
Notwithstanding anything in this Chapter, if at any time the Government are

satisfied that circumstances exist which render it necessary for them to call
a general meeting for election of members of the committee to be held in
accordance with the provisions of this Act, the Government or any person
authorised by them in this behalf shall have power to call such meeting and
to determine the place, time and the period of notice for such meeting. If at
such meeting, there is no quorum, the meeting shall stand adjourned to
such other date and time as the Government or person authorised may
determine. If at the adjourned meeting also there is no quorum for holding
the meeting, the members present shall constitute the quorum. When the
meeting is called by the Government it shall be presided over by a person

appointed by them in that behalf and if the meeting is called by the person
authorised by the Government, the person so authorised shall preside at
such meeting ; but the person presiding shall not be entitled to vote at the
meeting so called or adjourned.
(7)1[2[(a)(i)] If there is no committee or in the opinion of the Government or, the
Registrar, it is not possible to call a general meeting for the purpose of
conducting election of members of the committee, the Government, in respect
of such class of societies as may be prescribed and the Registrar in all
other cases may appoint a person or persons to manage the affairs of the
society for a period not exceeding six months and the Government may, on
their own and the Registrar with the previous approval of the Government,
extend, from time to time, such period beyond six months, so however that
the aggregate period include the extended period if any, shall not exceed
3
[three years].
4
[(ii)
(b)
(c)
(d)
1.
2.
3.
4.
5.
Notwithstanding anything contained in this Act, in the special circumstances

and for the reasons to be recorded, if in the opinion of the Government, it is
not possible to hold the elections to the societies or class of societies, the
Government may by order extend the term of the person or the persons
appointed to manage the affairs of the society or class of societies beyond
three years but not exceeding five years in aggregate.]
The person or persons so appointed shall, subject to the control of the
Government or as the case may be, of the Registrar and subject to such
instructions or directions as they may issue, from time to time, have power
to exercise all or any of the functions of the committee or any officer of the
society and to take all such actions as may be required in the interest of the
society.]
The Registrar may fix the remuneration payable to the person or persons so
appointed. The amount of such remuneration and other costs if any, incurred
in the management of the society shall be payable out of the funds of the
society.
The Registrar may at any time, and shall at the expiration of the period of
appointment of person or persons so appointed, arrange for calling of a general
meeting for the election of a new committee in such manner as may be
prescribed. The person or persons so appointed shall cease to manage the
affairs of the society on the new committee entering upon its office.
Clause (a) renumbered as clause (a)(i) by Act No. 13 of 2003, w.e.f. 5-8-2003.
Added by A.P. Act 13 of 2003, w.e.f. 5-8-2003.
(8)
All the expenses incurred in connection with a meeting held under this section
shall be paid out of the funds of the society :
Provided that the Registrar may by order direct that such expenses shall, in
a case falling under sub-section (5) be recovered from any person who is, in
the opinion of the Registrar, responsible for the failure to call the meeting.
32-A
2
[32-B.] Devolution of the powers and functions of the President or VicePresident:

If the President ceases to hold office under sub-section (3) of Section 32 or
if he has been continuously absent from the head-quarters for more than
fifteen days, or is incapacitated for more than fifteen days, his powers and
functions on such cessation or during such absence or incapacity shall
devolve on the Vice-President.
33.
Nominee of the Government on the Committee: [Rule 34]
(1)
Where the Government,
(a)
have subscribed to the share capital of a society, or
(b)
have assisted indirectly in the formation or augmentation of the share capital

of a society as provided in Section 43, or
(c)
have guaranteed the repayment of principal and payment of interest on

debentures issued by a society, or
(d)
have guaranteed the repayment of principal and payment of interest on loans

and advances to a society, the Government or any authority specified by the
Government in this behalf shall have the right to nominate to the committee
not more than 3[three persons as members] or one third of the total number
of members of the committee, whichever is less, 4[notwithstanding anything
contained in the bye-laws of society.]
(2)
A member nominated to the committee under sub-section (1), shall, hold

office during the pleasure of the Government or the specified authority, as
the case may be.
(3)
Any nominee of the Government may refer to the Government, through the
Registrar, any resolution the execution of which, in the opinion of the nominee,
is likely to be prejudicial to the interests of the Government and the decision
of the Government thereon shall be final and binding on the committee :
1.
2.

Section 32-A Renumbered as 32-B by Act 13 of 1990, which was earlier inserted by
Act No. 21 of 1985, w.e.f. 22.4.1966.
Added by Act No. 6 of 2005, w.e.f. 31.1.2005.
3.
4.
Provided that the Government may suspend the execution of any such
resolution pending the exercise of their powers under this sub-section.
34.
Supersession of the committee:
(1)
If in the opinion of the Registrar, the committee is not functioning properly or

wilfully disobeys or fails to comply wilfully with any lawful order or direction
issued by the Registrar under this Act or the rules, he may, after giving the
committee an opportunity of making its representation, by order supersede
the committee from a specified date ; and appoint either a person (hereinafter
referred to as the special officer) or a committee of two or more persons
(hereinafter referred to as the managing committee) to manage the affairs of
the society for a period not exceeding two years, specified in the order
which period, may, at the discretion of the Registrar, be extended from time
to time, so however, that the aggregate period shall not exceed three years.
(2)
Such order shall take effect from the date specified therein unless it is stayed
by the Government. Where such order is reserved by the Government, the
special officer or the managing committee shall forthwith handover the
management of the society to the committee.
(3)
The special officer or the managing committee shall, subject to the general
control of the Registrar and to such directions as he may from time to time,
give, have power to exercise all or any of the functions of the committee or of
any officer of the society.
(4)
(5)
(6)
The Registrar may fix the remuneration payable to the special officer or the
managing committee. The amount of remuneration so fixed and such other
expenditure incidental to the management of the society during the period of
the supersession as may be approved by the Registrar shall be payable
from the funds of the society.
At the expiration of the period of appointment of the special officer or the
managing committee, the Registrar shall arrange for the calling of a general
meeting for the election of a new committee in accordance with the provisions
of sub-section (5) of Section 32.
(1)
A motion expressing want of confidence in the President or the Vice-President

of a Committee may be made in accordance with the procedure laid down in
the following sub-sections.
(2)
A written notice of intention to make the motion, in such form as may be

prescribed, signed by not less than one-half of the total number of members
of the Committee together with a copy of the proposed motion shall be
delivered in person, by any two of the members signing the notice, to the
Registrar having jurisdiction over the Society.
Explanation:- For the removal of doubts, it is hereby declared that for the
purposes of this section, the expression total number of members of the
Committee shall mean the total number of elected members inclusive of its
President and Vice-President but irrespective of any vacancy existing in the
office of member at the time of meeting.
(3)
[34-A. Motion of no-confidence in the President and Vice-President of the

committee: [Rule 24A]
Inserted by Act No. 21 of 1985, w.e.f. 3-6-1985.
The Registrar shall then convene a meeting for the consideration of the motion
at the office of the society on a date appointed by him which shall not be
later than thirty days from the date on which the notice under sub-section (2)
was delivered to him. He shall give to the members notice of not less than
fifteen clear days of such meeting in such manner as may be prescribed :
Provided that where the holding of such meeting is stayed by an order of a
Court the meeting shall be adjourned, and the Registrar shall hold the
adjourned meeting on a date not later than thirty days from the date on
which he received the intimation about the vacation of stay, after giving to the
members notice of not less than fifteen clear days of such adjourned meeting.
(4)
The quorum for such a meeting shall be majority of the total number of
members of the Committee and the Registrar shall preside at such meeting.
If within half an hour after the time appointed for the meeting the Registrar is
not present to preside at the meeting, the meeting shall stand adjourned to
the next day.
(5)
If the Registrar is unable to preside at the meeting he may after recording his
reasons in writing adjourn the meeting to the next day to be presided over
either by himself or by an officer authorised by him in his behalf. The person
authorised under this sub-section shall be deemed to be the Registrar for
purposes of sub-sections (7), (10) and (11).
(6)
Save as provided in sub-sections (3), (4) and (5) a meeting convened for the
purpose of considering a motion under this section shall not for any reason
be adjourned.
(7)
As soon as the meeting convened under this section commences the

Registrar shall read to the Committee the motion for the consideration of
which the meeting has been convened and declare it to be open for debate,
Where a society is indebted to any financing bank, the Registrar shall, before
taking any action under sub-section (1) in respect of that society, consult
the financing bank.
1.
(8)
No debate on the motion under this section shall be adjourned.
(9)
Such debate shall automatically terminate on the expiration of two hours

from the time appointed for the commencement of the meeting if it is not
concluded earlier. On the conclusion of the debate or on the expiration of the
said period of two hours, whichever is earlier, the motion shall be put to vote.
(10)
The Registrar shall not speak on the merits of the motion and he shall not be
entitled to vote thereon.
(11)
If the motion is carried 1[with the support of not less than two thirds of the
total number of members] of the Committee, the Registrar shall by order
remove the President or, as the case may be, the Vice-President and the
resulting vacancy shall be filled in the manner prescribed.
(12)
If the motion is not carried by such a majority as aforesaid or if the meeting

could not be held for want of a quorum, no notice of any subsequent motion
expressing want of confidence in the same President or, as the case may
be, the Vice-President shall be made until, after the expiration of the one
year from the date of the meeting.
(13)
CHAPTER V
Rights and Privileges of Societies
35.
First charge of a society on certain movable assets of a member for

the amount due by him:
(1)
Notwithstanding anything in any law for the time being in force, but subject
to any claim of the Government in respect of land revenue, any debt or other
amount due to a society by any member including a past or deceased member
shall be a first charge upon the crop or other agricultural produce, cattle
fodder for cattle, agricultural or industrial implements or machinery, raw
materials for manufacture and any finished products manufactured from such
raw materials owned by such member.
(2)
Such charge shall be available even as against any amount recoverable by

the Government as if it were an arrear of land revenue or any claim of the
Government arising from a loan granted under the Land Improvement Loans
Act, 1883, subsequent to the incurring of the debt of the liability for the other
amount due to the society referred to in sub-section (1).
(3)
No person shall transfer any property which is subject to such charge except
with the previous permission in writing of the society which holds the charge
and any transfer, without such permission shall, notwithstanding anything in
any law for the time being in force, be void.
(4)
The charge under this section shall not be available against the following
articles of such members:-
(a)
the necessary wearing apparel, cooking vessels, beds and bedding and such
personal ornaments of a woman as in accordance with religious usage cannot
be parted with by her ;
(b)
ploughs, implements of husbandry, one pair of ploughing cattle, such manure

and seed grain stocked by him, as may be necessary for the due cultivation
of his lands in the ensuring year.
36.
Charge on the immovable property of a member for the loans

borrowed: [Rule 32]
[(1)
Notwithstanding anything in this Act or in any law for the time being in force,
but subject to any claim of the Government in respect of land revenue and to
any claim of an 2[Agricultural Development Bank] in respect of its dues, in
1.
2.

No notice of a motion under this section shall be made within one year of the
assumption of office by a President or the Vice-President.
[(14) The provisions of this section shall not apply in respect of President of any
co-operative society elected by the members of the general body from among
themselves.]
1.
2.

either case, whether prior in time or subsequent any member owning any
land or having interest in any land as a tenant, who applies to a society for a
loan, shall make a declaration in the form prescribed creating a charge in
favour of the society, on the land or interest specified in the declaration, for
the payment of the loan to be granted to him by the society in pursuance of
the application and for all future advances, if any, required by him, which the
society may grant to him, subject to such maximum as may be determined
by the society, together with the interest on such amount of the loan and
advances.]
(2)
1
[(3)
Such declaration may be varied or cancelled at any time by the member

with the consent of the society.
Subject to the provisions of sub-section (1) and to the claim of any person in
whose favour a mortgage or a charge has been created before the date of
registration of the declaration made under sub-section (1), no land in respect
of which such declaration has been made or any part of or any interest in
such land shall be sold or otherwise transferred until the entire amount of the
loan or advance taken by the member from the society together with interest
thereon is paid to the society; and any transaction made in contravention of
this sub-section shall be void :
Provided that, if a part of the amount borrowed by a member is paid, the
society may, on application from the member and with the approval of the
financing bank, release from the charge created under the declaration made
under sub-section (1), such part of the land or interest in such land specified
in the said declaration, as it may deem proper, with due regard to the security
of the balance of the amount remaining outstanding from the member :

1
[Explanation:- For the purposes of this section, the expression Society

means(i)
any society, the majority of members of which are agriculturists and the
primary object of which is to obtain credit for its members of any agricultural
purpose ; or
(ii)
any society or any class of societies specified in this behalf by the

Government by a general or special order.]
37.
Deduction from salary or wages: [Rule 33]
(1)
Notwithstanding anything in any other law for the time being in force, a
member of a society may execute an agreement in favour of that society
providing that his employer shall be competent, on a requisition in writing
from the society, to deduct every month from the salary or wages payable to
him such amount as may be specified in the requisition towards the amount
due by him to the society in respect of any debt or other amount due by the
member to the society, from time to time.
(2)(a) Where such agreement has been executed by a member, the employer of
such member shall, on receipt of a requisition from the society, make the
deduction from the salary or wages payable to the member in accordance
with the requisition, and pay, within such time as may be specified in the
rules in respect of any society or class of societies, the amount so deducted,
to the society.
(b)
Provided further that, nothing in this sub-section shall apply in respect of

2
[a mortgage created in favour of] an 3[Agricultural Development Bank,
subsequent to the date of Registration of the declaration made under subsection (1)].
(4)
1.
2.
3.
4.
5.
The declaration made under sub-section (1) or any variation or cancellation

thereof under sub-section (2) shall be sent by registered post by the society
to the Sub-Registrar having jurisdiction over the area in which the land 4[xxx]
is situated. He shall, if it is in order, register such declaration or variation or
cancellation and 5[return it] to the society and where it is not in order, he
shall return it to the society without registering it. Where it is registered, it
shall take effect from the time of its registration and where it is not registered,
it shall be of no effect.
Subs. by A.P. Act. No. 10 of 1970.
Where the amount to be deducted in any month in accordance with the

requisition made by a society, or where a requisition has been made by two
or more societies in respect of the same person, the total amount to be
deducted in accordance with all the requisitions, exceeds one-third of his
entire gross salary or wages for the month, the employer shall deduct from
the salary or wages of such person only a sum representing one-third of his
entire gross salary or wages for the month. The amount deducted shall,
where deductions have been made against requisitions received from two or
more societies be paid by the employer to all the societies in proportion to
the amounts to be deducted according to their requisitions :
Provided that where any amount is due to such class of societies as may
be specified in the rules, the entire gross salary or wages for the month on
such portion thereof as may be specified in the rules in respect of any such
class of societies may be deducted and paid as aforesaid.
(3)
The employer shall maintain such registers as may be prescribed.
1.
Added by A.P. Act No. 10 of 1970
(4)
The provisions of this section shall apply to all such agreements of the
nature referred to in sub-section (1) as are in force at the commencement of
this Act.
(5)
If such employer fails to comply with any of the provisions of this section, he
shall be punishable with fine which may extend to five hundred rupees.
(6)
Where a requisition in writing from any society registered or deemed to be

registered in any reciprocating State in respect of a member of that society
who for the time being is employed in this State, is received by his employer,
the requisition shall be acted upon as if it had been made by a society in
this State.
by any officer or former officer under Section 66, or the reserve fund of a
society 1[or the bad debts reserve of a Society] or the Provident Fund of its
employees invested under Section 46, shall not be liable to attachment or
sale, under any decree or order of a Court, in respect of any debt or liability
incurred by such member, or officer; and an official assignee or a receiver
under any law relating to insolvency shall not be entitled to or have any claim
on such share, interest, contribution or fund.
40.
Right to set-off where a registered society purchases immovable

property at a sale under the Andhra Pradesh Revenue Recovery Act,
1864, for any amount due to it:
(1)
Where, under this Act or any rule made thereunder, any amount due to a
society from any person is recoverable as an arrear of the land revenue and
immovable property of such person is brought to sale under the provisions of
the Andhra Pradesh Revenue Recovery Act, 1864, and the society is the
purchaser at such sale, the provisions of Section 36 of the said Act shall
apply thereto subject to the modification that for the third and fourth clauses
thereof, the following clauses were substituted, namely:
Explanation:For the purposes of this sub-section reciprocating State

means any State which the Government may, by notification in the Andhra
Pradesh Gazette, declare to be a reciprocating State.
(7)
Nothing in this section shall apply to establishments under a railway

administration operating any railway as defined in clause (20) of Article 366
of the Constitution or to any industry to which the Payment of Wages Act,
1936 is applicable.
Third: The sum due to the purchaser shall be set-off, in whole or in part,
against the purchase money and the remainder, if any, of the purchase money
shall be paid to the Collector or other officer empowered by the Collector in
that behalf within thirty days of the date of sale.
Explanation:- For the purposes of this section, employer shall include an

officer disbursing salary or wages of a member,
38.
Charge and set-off in respect of shares or interest of members in the

capital, etc., of a society:A society shall have a charge upon the share or interest in the capital,
deposits, dividend, bonus or profits payable to a member or a past member
or the estate of a deceased member in respect of any debt or other amount
due by him to the society and may set off any sum credited or payable to
such member against payment of any such debt or other amount due :
Fourth: Where the purchaser refuses or fails to make the payment of

the remainder, if any, of the purchase money the amount of loss or expense
consequent on such refusal or failure shall be a charge on the property
purchased, and shall be recoverable from such purchaser in the same manner
as arrears of land revenue. The amount so recovered shall be paid to the
owner of the immovable property.
(2)
Where a sale is conducted under Section 71, Section 103 or Section 104 by
the Registrar or any other person authorised by him, the provisions of subsection (1) shall apply as if it were a sale for the recovery of an arrear of land
revenue.
41.
Exemption from certain taxes, duties and fees:
Provided that no financing bank to which a society is affiliated shall have a

charge upon or set-off against any debt due from such society(i)
any sum invested in the financing bank as reserve fund by the society if the
bank is not the sole creditor of the society ; or
(ii)
any sum invested in it by the society as provident fund of its employees

established under Section 49.
39.
The Government, if in their opinion it is necessary in the public interest so to

do, may, by notification in the Andhra Pradesh Gazette, and subject to such
restrictions and conditions as may be specified in such notifications, reduce
or exempt in respect of any class of societies
Share or interest, etc., not liable to attachment:

The share or interest, of a member in the capital of a society or of an employee
in the provident fund established under Section 49 or the contribution made
by a member or past member or from the estate of a deceased member or
1.
Inserted by Act No. 10 of 1970
(a)
the taxes on professions, trades, callings and employments ;
(b)
the stamp duty with which, under any law for the time being in force,
instruments executed by or on behalf of a society or by an officer or member
and relating to business of such society or any class of such instruments or
decisions or orders of the Registrar or arbitrator or liquidator under this Act,
are respectively chargeable ; or
(c)
any fee payable under the law relating to registration for the time being in
force or Court-fees.
42.
Exemption from compulsory registration of instruments:
CHAPTER VI
Properties and Funds of Societies
43.
State aid to Societies: [Rule 34]

The Government may, subject to the rules,
(a)
give loans or advance moneys to a society ;
(b)
subscribe to the share capital of a society ;
(c)
provide moneys to a society-
(i)
for the purchase of shares of other societies ; or
Nothing in clauses (b) and (c) of sub-section (I) of Section 17 of the Indian
Registration Act, 1908 shall apply to
(a)
any instruments relating to shares in a society notwithstanding that the

assets of the society consist in whole or in part of immovable property;
(ii)
to enable it to provide moneys to another society to purchase shares in

other societies ;
(b)
any debentures issued by any such society and not creating, declaring,
assigning, limiting or extinguishing any right, title or interest to or in immovable
property except in so far as it entitles the holder to the security afforded by
a registered instrument whereby the society has mortgaged, conveyed or
otherwise transferred the whole or part of its immovable property or any
interest therein to trustees upon trust for the benefit of the holders of such
debentures ; or
(d)
guarantee the repayment of principal and payment of interest on debentures

issued by a society ;
(e)
guarantee the repayment of share capital of a society and dividends thereon

at such rates as may be specified by the Government ;
(f)
guarantee the repayment of principal and payment of interest on loans and

advance of moneys to a society ;
(g)
guarantee the repayment of deposits received by a society and payment of

interest on such deposits subject to such terms and conditions as may be
laid down by the Government ; and
(h)
give financial aid in any other form including subsidies to any society.
44.
Funds other than net profits not to be divided among members:

[Rule 35A]
(c)
any endorsement upon or transfer of any other debenture issued by any

such society.
No part of the funds other than the net profits of a society shall be paid by
way of bonus or dividend or otherwise distributed among its members:
Provided that a member may be paid remuneration from the funds on such
scale as may be prescribed for any service rendered by him to the society :
1
[Provided further that a President of the Society may be paid honorarium

from the funds of the Society at such rate as may be prescribed.]
2
[44-A. Constitution and utilisation of Co-operative Education Fund:[Rule 36A]

1.
2.
Added by A.P. Act No. 21 of 1985, w.e.f. 22.4.1985.

(1)
There shall be constituted a Co-operative Education Fund for the purpose of

promotion of Co-operative movement in the State and education of the
members and training of the officers of the cooperative societies on cooperative
principles and management practices.
All contributions made by the societies from out of their profit in a year,
grants-in-aid from the Government of India or the State Government and
donations by any persons, shall be credited to the Co-operative Education
Fund.

1
credit such portion of the profits, as may be prescribed, to the bad debts
reserve ;]
[(d)
pay towards dividend to members on their paid-up share capital, an amount

not being less than fifteen per cent of the net profit;
(e)
pay an amount not being less than fifteen per cent of the net profit towards
rebate to members on the amount or volume of business done by them with
the Society in the manner specified in the bye-laws.]
[(c)
(2)
Every society shall ensure the education of its members and training of its
officers.
(3)
The cooperative education fund shall be administered and utilised by the

Registrar on the advice of a committee constituted for the purpose in the
manner prescribed:
constitution of or contribution to, such special funds as may be specified in

the bye-laws ;
Provided, that not less than 20% of the cooperative education fund contributed
by the societies in a year shall be utilised towards the training of officers of
the societies concerned:
(d)
payment of bonus to employees of the society or remuneration to a member

for services rendered by him to the society to the extent and the manner
specified in the bye-laws ;
Provided further, that not less than 50% of the cooperative education fund
contributed by the societies shall be utilised on member education
programmes in a year.
(e)
donation of moneys, not exceeding ten per cent of the net profits to be
utilised within the area of operation of the society for any charitable purpose
as defined in Section 2 of the Charitable Endowments Act, 1890:
Disposal of profits: [Rule 36,64,36A,36B]
A society shall, subject to such limits as may be prescribed, credit one

percent of gross profit or gross income in a year, as the case may be, to the
Cooperative Education Fund.
(2)
A society shall credit an amount not being more than 30 percent of gross
profit or 2 percent of working capital, whichever is less, in a year to the
administrative and contingent fund towards pay and other allowances of its
employees and contingencies in the manner prescribed;]
[(3)] A society shall, out of its net profits in any co-operative year,
(a)
transfer an amount not being less than twenty-five per cent of the profits as
may be prescribed, to the reserve fund :
Provided that when the total amount so transferred becomes equal to the
amount of paid-up share capital, the amount to be transferred may, with the
previous permission of the Registrar, be reduced to a sum not less than ten
per cent of such profits;
(b)
1.
2.
3.
4.
(a&b) 4[Omitted by the Act No. 21 of 1985]

(c)
45.
[(1)
[(4)] The balance of the net profits may be utilised for all or any of the following
purposes, namely:
[xxx]
The word net omitted by Act No. 22 of 2001, dt. 25.4.2001.

Inserte by Act No. 22 of 2001, dt. 25.4.2001.
Renumbered by Act No. 22 of 2001, dt. 25.4.2001.
Provided that such moneys may be utilised with the permission of the
Government for any such purpose outside the area of operation of the society.
46.
Investment of funds: [Rule 37,38,39]

5
[A Society may by a resolution of majority of committee with due care and

diligence, invest or deposit its funds which are not immediately required for
the business of the society,(a)
in the Postal Savings Banks ;
(b)
in any of the securities specified in Section 20 of the Indian Trust Act, 1982
;
(c)
in the shares of securities of any other society :
[(d)
with any Nationalised Bank] 7[or Scheduled Bank ; or the concerned District
Co-operative Central Bank.]
1.
2.
3.
4.
5.
6.
7.
Inserted by Act No. 10 of 1970

Added by A.P. Act No. 21 of 1985, w.e.f. 22.4.1985.
Renumbered by Act No. 22 of 2001, dt. 25.4.2001.
Omitted by Act No. 21 of 1985.
(e)
[xxx]
[Explanation:- For purposes of this sub-section, small farmer means a

member who holds not more than such extent of land as may be notified by
the Government from time to time, and Government may notify different
standards for different districts or parts of districts.
[Provided that every primary agricultural credit society and every Co-operative
Central Bank shall invest or deposit in each co-operative year towards the
bad debts reserve of the said society or bank, a sum equal to one-fourth
percentum of the amount granted by it as short term loans or medium term
loans to its members during the co-operative year from out of the amounts
borrowed by it from other co-operative financial institutions for granting such
loans ; so however that no such investment or deposit shall be necessary
when the total amount so invested or deposited towards bad debts reserve
becomes equal to the total amount of bad debts of the society as estimated
by the auditor appointed under Section 50.]
47.
(b)
Every primary agricultural credit society shall, in such areas as may be

prescribed disburse the amount granted by it to any of its members towards
a short term loan or a medium term loan by way of cheque in favour of the
loanee or at the request of the loanee by money order ; and no such cheque
shall be endorsed by the loanee in favour of any officer of the society.]
48.
Restrictions on other transactions with non-members:[Rule 48]
Explanation: For the purposes of this section, sub-section (3) of Sections

47 and 71, the expression primary agricultural credit society means the
society referred to in clause (i) of Explanation to Section 36.
Restrictions on borrowings and loans: [Rule 40,41,41A,41B,41C]
Every Primary Weavers Co-operative Society shall produce cloth only through
the members of the society by supplying raw materials to the members and
receiving back cloth or fabric or product and shall not produce or purchase
cloth or fabric or product from any source other than the members of the
society either for sale on its own account or for sale through Federal Society
or others. But it may purchase cloth or fabric or product of other weavers cooperative societies with general or special sanction of Registrar for sale on
its own account to consumers or others.]
49.
Provident Fund: [Rule 44]
(1)
A society may, subject to the rules, establish a contributory provident fund

for the benefit of its employees to which shall be credited all the contributions
made by them and the society in accordance with its bye-laws.
(2)
The provident fund so established shall not,
[(1)] Save as otherwise provided in Section 47, the transactions of a society, with
persons other than members shall be subject to such restrictions, as may
be prescribed.
[(2)
(1)
A society shall [xxx] receive deposits and raise loans only to such extent
and under such conditions as may be specified in the bye-laws.
(2)
A society shall not grant a loan to any person other than a member, but it
may grant loans to another society with the general or special sanction of
the Registrar or to its employees on such terms as may be specified in the
bye-laws:
Provided that a society may make a loan to a depositor on the security of
his deposit.
[(3)(a) Subject to such directions as the Reserve Bank of India may give to Cooperative Banks in this behalf, primary agricultural credit societies shall,
during a co-operative year, disburse to small farmers such proportions, having
regard to the class of societies and the strength of membership of small
farmers therein, as may be prescribed, out of the total amounts borrowed by
them from the co-operative financial institutions, for granting short term loans
or medium term loans to their members during that year, so however that the
amount of any such loans that may be granted to each of their members,
whether or not he is a small fanner, shall not in the aggregate exceed such
amount or amounts as the Government may, from time to time, by notification
in the Andhra Pradesh Gazette, specify in relation to the various classes of
members and having regard to the purposes for which loans are required.
1.
2.
3.
4.

Omitted by Act No. 21 of 1985,w.e.f. 22.4.1985
(a) be used in the business of the society ;

(b) form part of the assets of the society ; or
(c) be liable to attachment or be subject to any other process of any Court or
other authority.
(3)
Notwithstanding anything in this section, a provident fund established, by a

society to which the Employees Provident Fund Act, 1952, is applicable,
shall be governed by that Act.
1.
2.
3.

Renumbered by A.P. Act No. 28 of 1988, w.e.f. 9.5.1988.
Added by Ibid.
(4)
The audit shall be completed within a period of six months from the close of
the Co-operative year of the registered society concerned and such other
further period not exceeding six months as the Chief Auditor may permit for
reasons to be recorded in writing.]
51.
Inquiry: [Rule 47,50]
CHAPTER VII
Audit, Inquiry, Inspection and Surcharge
50.
Audit: [Rule 45,46]
(1)
There shall be a separate wing for audit in the Co-operative Department

headed by the Chief Auditor who will work under the general superintendence
and control of the Registrar of Co-operative Societies. The Chief Auditor
shall audit or cause to be audited by a person authorised by him by a general
or special order in this behalf, the accounts of a society at least once in
every year and shall issue or cause to be issued an audit certificate with
such particulars as may be prescribed, before the end of the succeeding cooperative year. Such audit shall primarily cover an examination of the debts,
overdue, if any, verification of the cash balance and securities and valuations
of the assets and liabilities of the society, 1[including prudent management
of the affairs of the society in accordance with the Act, rules and byelaws.]
The Registrar, may of his own motion and shall, on the application of a
society to which the society concerned is affiliated, or of not less than one
third of the members of the Committee, or of not less than one fifth of the
total number of members of the society, hold an inquiry or direct some person
authorised by him by an order in this behalf to hold an inquiry into the
constitution, working and financial condition of a society. Such inquiry shall
be completed within a period of four months and the report of inquiry along
with the findings of the Registrar thereon shall be communicated to the
managing committee of the society. It shall be the responsibility of the
managing committee to place the inquiry report before the General Body or
Special General Body convened for the purpose for its information, within a
period of one month from the communication of the inquiry report by the
Registrar. The Registrar shall be competent to initiate action under the
provisions of this Act, if the committee fails to take action as aforesaid:
[Provided that in respect of a society not in receipt of State aid as specified

in Section 43 of the Act, the committee of such society shall cause the
audit of accounts of the society, every year as per the audit manual prescribed
by the Registrar, either through the Chief Auditor or a Chartered Accountant
2
[authorized by the Chief Auditor, and the Chief Auditor or the officer authorized
by him shall issue Audit Certificate of such society.] Where such society
opts to get the accounts of the society audited by the Chief Auditor, the later
shall audit or cause to be audited the accounts of such society in the manner
prescribed.]
(2)
[(3)
1.
2.
3.
Provided that notwithstanding anything contained in this Act and the Rules
made thereunder, the bye laws of a society and the action of the society in
placing the inquiry report alongwith the findings of the Registrar, the Registrar
shall not be precluded from taking follow up action as may be required on
the basis of inquiry report :
Provided further that such action shall not be nullified even if the General
Body of the Society passes a resolution negativing the findings of the inquiry:
Provided also that the Registrar may for reasons to be recorded in writing
extend the period of four months for completion of inquiry for a further period
not exceeding two months.
Every person who is, or has at any time being, an officer or employee of the
society and every member including a past member shall furnish such
information in regard to, any transaction, working and affairs of the society
as Chief Auditor or such person authorised by him may require.
Explanation: For the purposes of this section, Managing Committee

includes a Committee constituted under Section 31(l)(a), and a person-incharge appointed under Section 32(7)(a) and also a special officer appointed
under Section 34 of the Act.]
The committee shall prepare and submit or cause to be prepared and

submitted within such period not exceeding six months as may be prescribed
for different classes of societies after the end of the co-operative year, to the
Chief Auditor or the person authorised by him as the case may be, such
statements and reports as may be prescribed for the purpose of the audit of
accounts of the Society for the Co-operative year.
52.

Inserted by Act No. 6 of 2005, w.e.f. 31.1.2005.
1.
Inspection: [Rule 59,60]
[(1)] The Registrar may, of his own motion or on the application of a creditor of a
society, inspect or direct any person authorised by him by a general or
special order in this behalf to inspect the books of the society.
Renumbered by Act No. 21 of 1985, w.e.f. 22-4-1985.

1
[Such inspection shall be completed within a period of three months from

the date of order of inspection.]
53.
Provided that no such inspection shall be made or directed on the application

of a creditor unless the creditor:
(a)
satisfies the Registrar that the debt is a sum then due and that he has
demanded payment thereof and has not received satisfaction within a
reasonable time ; and
(b)
deposits with the Registrar such sum as security, for the costs of the proposed
inspection as the Registrar may require.
[(2)
A financing bank or a federal society shall have the right to inspect the
books of any society which is indebted to it. The inspection may be made
either by an officer of the financing bank or federal society authorised by the
committee of such bank or society or by a member of its paid staff certified
by the Registrar as competent to undertake such inspection. The officer or
member so authorised to conduct inspection] shall at all reasonable times
have free access to the books, accounts, documents, securities, cash and
other properties belonging to or in the custody of the society and may also
call for such information, statements and returns as may be necessary to
ascertain the financial condition of the society and the safety of the sums
lent to it by such bank or society. 1[The Officer or Member so authorised to
conduct the inspection shall prepare a report of inspection which shall be
communicated to the Managing Committee of the society together with the
findings of the Registrar thereon. It shall be the responsibility of the Managing
Committee to place the Inspection Report together with the findings of the
Registrar before the General Body or Special General Body convened for the
purpose for its information, within a period of one month of the communication
of the Inspection Report by the Registrar. The Registrar shall be competent
to initiate action under the provisions of this Act, if the Committee fails to
take action as aforesaid:
The Registrar or any person authorised by him under sub-section (1) shall
prepare a report of inspection which shall be communicated to the Managing
Committee of the Society together with the findings of the Registrar thereon.
It shall be the responsibility of the Managing Committee to place the inspection
report together with the findings of the Registrar before the General Body or
Special General Body convened for the purpose for its information, within a
period of one month of the communication of the inspection report by Registrar.
The Registrar shall be competent to initiate action under the provisions of
this Act, if the Committee fails to take action as aforesaid:
Provided that notwithstanding anything contained in this Act and Rules made
thereunder, the bye-laws of a society and the action of the society in placing
the inspection report along with the findings of the Registrar, the Registrar
shall not be precluded from taking, follow up action as may be required on
the basis of inspection report:
Provided that such action shall not be nullified even if the General Body of
the Society passes a resolution negativing the findings of the Registrar:
Provided further that notwithstanding anything contained in this Act and Rules
made thereunder the bye-laws of a Society and the action of the Society in
placing the Inspection Report alongwith findings of the Registrar, the Registrar
shall not be precluded from taking, follow up action as may be required on
the basis of Inspection Report.
Provided further that such action shall not be nullified even if the General
Body of the Society passes a resolution negativing the findings of the
Registrar:
Provided also that the Registrar may for reasons to be recorded in writing
extend the period of three months for completion of inspection for a further
period not exceeding two months.
Explanation: For the purposes of this section, Managing Committee
includes an Adhoc Committee constituted under Section 31(l)(a), and a
person-in-charge appointed under Section 32(7)(a) and also a Special Officer
appointed under Section 34 of the Act.
1.
2.
Added by Act 15 of 2000 w.e.f. 28-7-2000.

Inspection of books by financing bank or federal society:

[Rule 50]
Explanation:- For the purposes of this section, Managing Committee

includes a Committee constituted under Section 31(l)(a), and a person-incharge appointed under Section 32(7)(a), and also a Special Officer appointed
under Section 34 of this Act.
54.
Rectification of defects in audit, inquiry or inspection:

The Registrar shall draw the attention of the society to the defects noticed in
every audit conducted under Section 50 or inquiry held under Section 51 or
inspection made under Section 2[52, or Section 53] and if the society is
affiliated to another society, also the attention of that other society and may
1.
2.
Subs by Act No. 15 of 2000, w.e.f. 21-7-2000.

make an order directing the society or its officers to take such action and
within such time as may be specified therein to remedy such defects.
55.
Power to summon and examine documents and persons etc.:

[Rule 50]
The Registrar, or the Chief Auditor or any person authorised by either of

them to exercise any powers under this Act, shall at all reasonable times,
have free access to the books, accounts, documents, records, securities,
cash and other properties belonging to, or in the custody of the society and
may summon any person in possession of, or responsible for the custody of
any such books, accounts, documents, records, securities, cash or other
properties, to produce all or any of them at any place at the headquarters of
the society or any branch thereof.]
[(l)
(2)
The Registrar or any person authorised by him to exercise any powers under
this Act,
(a)
may summon any person who, he has reason to believe has knowledge of
any of the affairs of the society to appear before him at any place at the
headquarters of the society or any branch thereof or at any other place
specified by the Registrar, and may examine that person on oath :
(b)
may seize the books, accounts or documents belonging to, or in the custody
of, the society, if he considers that such seizure is necessary to ensure
safety of such books, accounts or documents, and shall give the person
from whose custody the books, accounts or documents have been seized,
a receipt for the same :
Provided that the books, accounts or documents so seized shall be retained
by him only for so long as may be necessary :
prescribed and shall be responsible for the correct and up-to-date maintenance
and authentication of such accounts and books and for producing or causing
production of the same when called for in connection with audit, inquiry,
inspection or election ;]
(2)
If such accounts and books are not maintained the Registrar may direct the
person who is responsible to bring the accounts and books upto date to
make them upto date, and he shall be bound to comply with such direction
within the period specified therein.
(3)
If the person fails to comply with the direction under sub-section (1) the
Registrar may suspend such person for such period as he may consider
necessary and authorise any person to take action for bringing such accounts
and books upto date at the expenses of the society and such expenses
shall be recoverable from the society as if it were an arrear of land revenue.
(4)
Where the Registrar takes action under sub-section (3) the Registrar may
call upon the person concerned whom he considers to be responsible for not
complying with the direction made under sub-section (2) and after giving
such person an opportunity of being heard, may require him to pay the society
the expenses paid or payable by it to the Government as a result of his
failure to take action.
The Chief Executive Officer of the society or the President where there is no
such Chief Executive Officer for that society shall be the custodian of all
books of account of the society,]
56.
Cost of inquiry and inspection:
(1)
Where an inquiry is held under Section 51 or an inspection is made under

Section 52, the Registrar may, after giving the parties an opportunity of making
their representations, apportion the costs, or such part of the costs as he
may think fit, between the society, the members or creditors demanding an
inquiry or inspection, the officers or former officers of the society. Costs may
also be awarded by the Registrar to the financing bank or federal society in
the case of inspection under Section 53 by such bank or society.
(2)
Any amount awarded by way of costs under sub-section (1) may be recovered
as if it were an arrear of land revenue.
57.
Society to pay certain expenses:
[(5)
Provided farther that the books, accounts or documents so seized shall not
be retained for more than sixty days at a time except with the permission of
the next higher authority.
2
[55-A. Maintenance of Accounts and Books, etc.: [Rule 58,59]
[(1)
1.
2.
3.
The Chief Executive Officer of every society by whatsoever designation he is

called, and the President of the society jointly and severally or the President
of such society if there is no such chief executive officer for that society,
shall be bound to keep, maintain or cause to maintain, sign and authenticate
such accounts and books relating to that society in such manner as may be
Subs by A.P. Act No. 14 of 1966.

Every society shall pay to the Government such amount as may be determined
in the prescribed manner in respect of any special or additional staff employed
at the request of the society by the Government for the purpose of the society.
1.

1
[58.
order requiring him to repay or restore the money or property or any part
thereof with interest at such rate as the Registrar or the person authorised
as aforesaid thinks just or to contribute such sum to the assets of the society
by way of compensation in respect of the misappropriation, misapplication
of funds, fraudulent retention, breach of trust, or wilful negligence as the
Registrar or the person authorised as aforesaid thinks just :
Payment of fees to the Government for services rendered to a society,

etc.: [Rule 46,48]
Every person shall pay to the Government such fees, as may be prescribed,
for the services rendered by the Government to him in respect of audit,
execution or arbitration proceedings, or any other prescribed manner.]
59.
Suspension of officer or servant of society:
(1)
Where in the course of an audit under Section 50 or an inquiry under Section

51 or an inspection under Section 52 or Section 53, it is brought to the
notice of the Registrar that a paid officer or servant of a society has committed
or has been otherwise responsible for misappropriation, breach of trust or
other offence, in relation to the society, the Registrar may, if in his opinion
there is prima facie evidence against such paid officer or servant and the
suspension of such paid officer or servant is necessary in the interests of
the society, direct the committee pending the investigation and disposal of
the matter, to place or cause to be placed such paid officer or servant under
suspension from such date and for such period as may be specified by him,
but not retrospectively.
(2)
On receipt of such direction, the committee shall, notwithstanding any

provision to the contrary in the bye-laws, place or cause to be placed the
paid officer or servant under suspension forthwith.
(3)
The Registrar may direct the committee to extend, from time to time, the
period of suspension and the paid officer or servant suspended shall not be
reinstated except with the previous sanction of the Registrar.
60.
(1)
1.
2.
Surcharge:
2
[Notwithstanding anything contained in any other law for the time being in
force where in the course of an audit under Section 50 or an inquiry under
Section 51 or an inspection under Section 52 or Section 53, to the winding
up of a society, it appears that any person who is or was entrusted with the
organisation, affairs or management of the society or any past or present
officer or servant of the society has misappropriated or fraudulently retained
any money or other property or has been guilty of breach of trust in relation
lo the society or has caused any deficiency in the assets of the society by
breach of trust or wilful negligence or has made any payment contrary to the
provisions of this Act, the rules or the bye-laws, the Registrar himself, or any
person specially authorised by him in this behalf, of his own motion or on the
application of the committee, liquidator or any creditor or contributor, may
inquire into the conduct of such person or officer or servant and make an

Provided that no order shall be passed against any person referred to in this
sub-section unless the person concerned has been given an opportunity of
making his representation.
(2)
Any sum ordered under this section to be repaid to a society or recovered as

a contribution to its assets may be recovered on a requisition being made in
this behalf by the Registrar to the Collector in the same manner as arrears of
land revenue.
(3)
This section shall apply notwithstanding that such person or officer or servant
may have incurred criminal liability by his act.
CHAPTER VIII
(2)
Settlement of Disputes
1
61.
Disputes which may be referred to the Registrar:-
(1)
Notwithstanding anything in any law for the time being in force, if any dispute
touching the constitution, management or the business of a society, other
than a dispute regarding disciplinary action taken by the society or its
committee against a paid employee of the society, arises-
(a)
among members, past members and persons claiming through members,

past members and deceased members ; or
(b)
between a member, past member or person claiming through a member,

past member or deceased member and the society, its committee or any
officer, agent or employee of the society ; or
(c)
(d)
between the society or its committee, and any past committee, any officer,
agent or employee, or any past officer, past agent, or past employee or the
nominee, heir or legal representative of any deceased officer, deceased agent
or deceased employee of the society ; or
between the society and any other society,
[(3)
Every dispute relating to, or in connection with, any election to a committee

of a society shall be referred for decision to the Tribunal having jurisdiction
over the place where the main office of the society is situated, whose decision
thereon shall be final.]
(4)
Every dispute .relating to, or in connection with any election 2[shall be referred
under sub-section (3) only after the date of declaration of the result of such
election.]
62.
Action to be taken by the Registrar on such reference: [Rule 48,49,50]
(1)
The Registrar may, on receipt of the reference of a dispute under Section 61,
(a)
elect to decide the dispute himself ; or
(b)
transfer it for disposal to any person who has been invested by the Government
with powers in that behalf ; or
(c)
refer it for disposal to an arbitrator.
(2)
Where the reference relates to any dispute involving immovable property, the
Registrar or such person or arbitrator may order that any person be joined as
a party who has acquired an interest in such property subsequent to the
acquisition of interest therein by a party to the reference and any decision
that may be passed on the reference by the Registrar or the person or the
arbitrator aforesaid, shall be binding on the party so joined as if he were an
original party to the reference.
(3)
The Registrar may, by order for reasons to be recorded therein, withdraw any
reference transferred under Clause (b) of sub-section (1) or referred under
Clause (c) of that sub-section and may elect to decide the dispute himself or
transfer it to any other person under Clause (b) of sub-section (1) or refer it to
any other arbitrator under Clause (c) of that sub-section.
(4)
The Registrar, such person or arbitrator shall decide the dispute in accordance
with the provisions of this Act and the rules and bye-laws and such decision
shall, subject to the provisions of Section 76, be final. Pending final decision
on the dispute, the Registrar, such person or arbitrator, as the case may be,
may make such interlocutory orders as he may deem necessary in the
interest of justice.
1.
2.

such dispute shall be referred to the Registrar for decision.

Explanation:- For the purposes of this sub-section a dispute shall include(i)
a claim by a society for any debt or other amount due to it from a member,
past member, the nominee, heir or legal representative of a deceased member,
whether such debt or other amount be admitted or not ;
(ii)
a claim by surety against the principal debtor where the society has recovered
from the surety any amount in respect of any debt or other amount due to it
from the principal debtor as a result of the default of the principal debtor
whether such debt or other amount due to be admitted or not ;
(iii)
a claim by a society against a member, past member, or the nominee, heir

or legal representative of a deceased member for the delivery of possession
to the society of land or other immovable property resumed by it for breach
of the conditions of assignment or allotment of such land or other immovable
property ;
1
1.
[xxx]
If any question arises whether a dispute referred to the Registrar under this
section is a dispute touching the constitution, management or the business
of a society, such question shall be decided by the Registrar.
63.
Powers of financing bank to proceed against members of a society

for recovery of moneys due to it from such society:-
(1)
If a society is unable to pay its debts to a financing bank by reason of its

members committing default in the payment of the moneys due by them,
the financing bank may direct the committee of such society to proceed
against such members under Section 61 or Section 70, as the case may
be, and if the committee fails to do so within a period of ninety days from the
date of receipt of such direction, the financing bank itself may proceed against
such members under Section 61 or Section 70, in which case, the provisions
of this Act, the rules or the bye-laws shall apply as if all references to the
society or its committee in the said provisions were references to the financing
bank.
(2)
Where a financing bank has obtained a decree or award against a society, in

respect of moneys due to it from the society, the financing bank may proceed
to recover such moneys firstly from the assets of the society and secondly
from the members to the extent of their debts due to the society.
CHAPTER IX
Winding up and cancellation of
Registration of Societies
64.
Winding up of Societies: [Rule 50,50A]
(1)
If the Registrar, after an inquiry has been held under Section 51 or an inspection
has been made under Section 52, or on receipt of an application made by
not less than two- thirds of the members, is of opinion that the society ought
to be wound up, he may after giving the Society an opportunity of making its
representation, by order direct it to be wound up.
(2)
The Registrar may, of his own motion and after giving the society an
opportunity of making its representation, if any, make an order directing the
winding up of a society-
(a)
where it is a condition of the registration of the society that the society shall
consist of at least ten members and the membership falls short of that number
; or
(b)
where the society, has not commenced working within the prescribed period
or has ceased to work ; or
where in the opinion of the Registrar the society is conducting its affairs in a
manner detrimental to the interests of its members or the promotion of the
object for which it has been registered.]
65.
Appointment of liquidator:
(1)
Where the Registrar has made an order under Section 64 for the winding up
of a society, he may appoint a liquidator for that purpose and fix his
remuneration.
(2)
On the appointment of a liquidator, the property, assets, effects and actionable

claims or liabilities of the society as on the date of appointment shall vest in
or devolve on the liquidator. He shall take such steps as he may deem
necessary or expedient to prevent loss or deterioration of, or damage to,
such property, assets, effects and actionable claims.
(3)
Where an order of winding up of a society is set aside in appeal the property,

assets, effects and actionable claims or liabilities of the society as on the
date of such setting aside shall revest in or devolve on the society.
1.
[(c)
66.
Power of the liquidator: [Rule 51]
(1)
Subject to the control of the Registrar, the liquidator shall have the power
(a)
to institute and defend suits and other legal proceedings on behalf of the
society by the name of his office ;
(b)
to realise the assets of the society, by sale or otherwise ;
(c)
to determine, from time to time, the contribution to be made or remaining to

be made and the debts due by the members or past members or by the
estates or nominees, heirs or legal representatives of deceased members or
by any officers or former officers to the society ;
(d)
to investigate all claims against the society, and subject to the provisions of
this Act, to decide questions of priority arising between claimants ;
(e)
to pay claims against the society including interest upto the date of winding
up according to their respective priorities, if any, in fall or rateably, as the
assets of the society may permit, the surplus, if any, remaining after payment
of the claims, being applied in payment of interest from the date of such
order of winding up at a rate fixed by him but not exceeding the contract rate
in any case ;
(f)
to determine by what persons and in what proportions the costs of liquidation

are to be borne ;
(g)
to determine whether any person is a member, past member or nominee of

deceased member ;
(h)
to give such directions in regard to the collection and distribution of the

assets of the society as may appear to him to be necessary for winding up
the affairs of the society ;
(i)
to carry on the business of the society so far as may be necessary for its
beneficial winding up ;
(j)
with the previous approval of the prescribed authority, to make any compromise
or arrangement with creditors or persons claiming to be creditors or having
or alleging to have any claim present or future, whereby the society may be
rendered liable; and
(k)
with the previous approval of the prescribed authority, to compromise all

calls or liabilities to any calls and debts and liabilities capable of resulting in
debts and all claims present or future, certain or contingent, subsisting or
alleged to subsist between the society and a contributory or alleged
contributory or other debtor or person apprehending liability to the society
and all questions in any way relating to or affecting the assets or the winding
up of the society on such terms as may be agreed and take any security for
the discharge of any such call, liability, debt or claim and give a complete
discharge in respect thereof ;

1
[(1)
to raise on the security of the assets of the society any money required with
the permission of the Government.]
(2)
Any sum ordered under this section to be recovered as a contribution to the

assets of a society or as costs of liquidation may be recovered, on a requisition
being made in this behalf by the Registrar to the Collector in the same
manner as arrears of land revenue.
(3)
Save as provided in sub-section (2), orders made under this section shall,
on application, be enforced by any Civil Court having local jurisdiction in the
same manner as a decree of such Court.
(4)
The liquidator shall continue to exercise his powers until the affairs of the
society are completely wound up, when he shall make a report to the Registrar
and deposit the records of the society in such place as the Registrar may
direct.
67.
Restriction on alienation of property by a member of a society under

winding up:
Where a society has been ordered to be wound up under Section 64, no
member shall alienate his property movable or immovable, from the date of
the order of winding up and until after expiration of fifteen days from the date
on which the order of winding up takes effect. Any alienation of the property
made by a member in contravention of this section is voidable at the option
of the liquidator :
Provided that the provisions of this section shall not apply to any member
who furnishes adequate security to the satisfaction of the liquidator.
68.
Cancellation of registration of a society:

Where the affairs of a society have been completely wound up, after
considering the report of the liquidator under sub-section (4) of Section 66,
the Registrar shall, by order in writing, cancel the registration of the society.
The society shall cease to exist as a corporate body from the date of such
order.
69.
Restoration of a society wound up:

Where in the opinion of the Registrar, a society which has been ordered to
be wound up may be restored to a committee constituted in accordance
with the provisions of this Act, the rules, and bye-laws, he may, at any time,
before the affairs of the society have been completely wound up, cancel or
withdraw the order of winding up and direct the liquidator to constitute a
committee in accordance with the provisions of this Act, the rules and bye-
1.
laws and handover the management of the affairs of the society to such
committee. The property, assets, effects and actionable claims or liabilities
of the society as on the date of such cancellation or withdrawal shall revest
in, or devolve on, the society.
1
[69-A. Termination of liquidation proceedings:
(1)
(2)
The winding up proceedings shall be closed within a period of three years

from the date of the order of winding up and after the expiry of the said period
of three years it shall be deemed that the liquidation proceedings have been
terminated, and the Registrar shall pass an order terminating the liquidation
proceedings.
On the termination of the liquidation proceedings the liquidator shall make a
report to the Registrar.
CHAPTER X
Execution of Decisions, Decrees and Orders
70.
Power of the Registrar to recover certain amount by attachment and

sale of property and execution of orders: [Rule 52,55A]
(1)
The Registrar or any person authorised by him in this behalf may, without
prejudice to any other mode of recovery provided by or under this Act,
recover
(a)
any amount due under a decision or an order of the Registrar, or any person
authorised by him, or an arbitrator;
(b)
any amount ordered to be paid towards the expenses of a general meeting

of a society called under Section 32 ;
(c)
any amount awarded by way of costs under Section 56 to a society including

a financing bank or a Federal society;
(d)
any amount payable 1[xxx] towards fees under Section 58;
(e)
any amount ordered under Section 60 to be repaid to a society or recovered

as a contribution to its assets ; or
(f)
any amount ordered under Section 66 to be recovered as a contribution to

its assets, together with the interest, if any, due on such amount and the
costs of process by the attachment and sale or by sale without attachment
of the property of the person or the society against whom such decision or
order, has been passed or obtained.
(2)
Every order or decision made under Section 60, Section 71 Section 76,
Section 77 or Section 78 for the recovery of any amount may be executed in
the following manner:
(a)
by the Civil Court having local jurisdiction on a certificate signed by the

Registrar or any person authorised by him in this behalf as if the order or
decision were a decree of that Court ; or
(b)
by the Collector, on an application made to him within twelve years from the
date fixed for payment in the order or decision and if no such date fixed from the
date of the order or decision, along with a certificate signed by the Registrar or
by any person authorised by him in this behalf, as if the amount due under the
order or decision were an arrear of land revenue; or
1.
69-B. Disposal of surplus assets:

Surplus assets as shown in the final report of the liquidator of a society
which has been wound up shall be utilised for such purposes as may be
specified in the bye-laws. Where the society has no such bye-laws, the
surplus assets shall vest in the Registrar who shall hold it in trust and shall
transfer it to the reserve funds of a new society registered with a similar
object and serving more or less an area which the society to which the
surplus belonged was serving ;
Provided that where no such society is registered within a period of three
years of the cancellation of the registration of the society whose surplus is
vested in the Registrar, the Registrar may distribute the surplus to the Federal
society with similar objects or to the Andhra Pradesh State Co-operative
Union, or for any charitable purpose as defined under the Charitable
Endowments Act, 1890. (Central Act IV of 1890).]
1.
(c)
[70A. Execution of non-monetary orders etc.:

Every order or decision of a non-monetary nature made under the provisions
of Section 62, Section 76, Section 77 or Section 78, shall be executed by
the Civil Court having jurisdiction, as if such order or decision is a decree of
that Court on a certificate issued by the Registrar or any person authorised
by him in this behalf.]
[71.
(1)
(2)
(3)
72.
or to take steps in aid of such recovery to be a Civil Court for the purpose of
[Article 182 of the First Schedule to the Indian Limitation Act, 1908.]
by the Registrar or any other person authorised by him in this behalf, in the
manner provided under sub-section (1).
73.
It the Registrar is satisfied on application, report, inquiry or otherwise that

any person with intent to delay or obstruct the enforcement of any decision
or order that may be made against him under the provisions of this Act
(a)
is about to dispose of the whole or any part of his property; or
(b)
is about to remove the whole or any part of his property from the jurisdiction
of the Registrar, the arbitrator or liquidator, as the case may be.
Recovery of debts:
Notwithstanding anything in this Act or in any other law for the time being in
force and without prejudice to any other mode of recovery which is being
taken or may be taken, the Registrar may, 3[on the application made by a
society or financing bank or federal society as the case may be, for the
recovery of arrears of any sum advanced to any of its members and on
furnishing a statement] of accounts in respect of the arrears and after making
such inquiry as he deems fit issue a certificate for the recovery of the amount
stated therein to be due as arrears.
Where the Registrar is satisfied that 4[a society] has failed to take action
under sub-section (1) in respect of any amount due as arrears, he may on
his own motion, and after making such enquiry as he deems fit, issue a
certificate for the recovery of the amount stated therein to be due as arrears
and such a certificate shall be deemed to have been issued on an application
made by the society concerned.
Attachment of property before decision or order: [Rule 54]
He may, unless adequate security is furnished direct the attachment of the

said property, and such attachment shall have the same effect as if made by
a competent Civil Court.
74.
Recovery of amounts due to Government: [Rule 55]
(1)
Any amount due from a society or from an officer, former officer or member
or past or deceased member of a society as such to Government including
any costs awarded to Government under this Act may on a certificate issued
by the Registrar in this behalf, be recovered by the Registrar or any other
person authorised by him in this behalf or by the Collector in the same
manner as arrears of land revenue.
(2)
Any amount due from a society to Government and recoverable under subsection (1) may be recovered, firstly from the property of the society, secondly
in the case of a society the liabilities of the members of which is limited,
from the members, past members, or the estates of deceased members
subject to the limit of their liability, and thirdly in the case of other societies,
from the members, past members or the estates of deceased members:
A certificate issued by the Registrar under sub-section (1) or sub-section (2)

shall be final and conclusive proof of the arrears stated to be due therein and
the certificate shall be executed in the manner specified in sub-section (2) of
Section 70.]
Provided that the liability of past members and the estates of deceased
members shall in all cases be subject to the provisions of Section 29.
Registrar or person authorised by him to be a Civil Court for certain

purposes:
The Registrar or any person authorised by him in this behalf shall be deemed,
when exercising any power under this Act for the recovery of any amount by
the attachment and sale or by sale without attachment of any property, or
when passing any orders on any application made to him for such recovery,
1.
2.
3.
4.
Inserted by A.P. No. 3 of 1991.

1.
See now Article 136 of Schedule to Limitation Act, 1963.
(2)
On a reference made by the Registrar of Cooperative Societies, the Tribunal

shall call for and examine the records of any proceeding which is appealable
to it for the purpose of satisfying itself as to the legality or propriety of any
decision or order passed and where it appears to the Tribunal that any such
decision or order should be modified, annulled or reversed, the Tribunal may
pass such order thereon as it may deem fit:
(3)
Any appeal under sub-section (1) shall, subject to the other provisions of
this Act, be preferred within sixty days from the date of communication to
the appellant of the decision, refusal or order complained of but the Tribunal
may admit an appeal preferred after the said period of sixty days, if it is
satisfied that the appellant has sufficient cause for not preferring the appeal
within the said period.
(4)
In disposing of an appeal under this section, the Tribunal may, after giving
the parties an opportunity of making their representations, pass such order
thereon as it may deem fit.
(5)
The decision or order of the Tribunal on appeal shall be final.
(6)
The Tribunal may pass such interim orders pending the decision on the
appeal as may deem fit.
CHAPTER XI
Appeal, Revision and Review
1
[75.
Constitution of Co-operative Tribunal:
(1)
The Government may, for the purpose of this Act, by notification constitute
as many Tribunals as may be necessary for such area or areas as may be
specified in the notification.
(2)
The Tribunal shall consist of a Chairman and not more than two other members
to be appointed by the Government.
(3)
The Chairman shall be a person who is or has been a judicial officer not
below the rank of a District Judge and a member shall be a person, who
holds or has held a post not below the rank of Additional Registrar of Cooperative Societies.
(4)
The Government may, from time to time, likewise reconstitute any Tribunal
constituted under sub-section (1) or may abolish such Tribunal.
(5)
The quorum to constitute a meeting of a Tribunal and the manner of taking

decision thereat and the procedure and conduct of its business shall be
such as may be prescribed.
(7)
The Tribunal may award costs in any proceedings before that authority to be
paid either out of the funds of the society or by such party to the appeal as
the Tribunal may deem fit.]
(6)
No Act or proceeding of any Tribunal shall be deemed to be invalid by reason

only of the existence of any vacancy among its members or any defect, in
the constitution or reconstitution thereof.
77.
Revision:
(1)
The Registrar may of his own motion or on application made to him, call for
and examine the record of any officer subordinate to him and the Government
may of their own motion or on application made to them, call for and examine
the record of the Registrar, in respect of any proceeding not being a proceeding
in respect of which an appeal to the Tribunal is provided by sub-section (1) of
Section 76 to satisfy himself or themselves as to the regularity of such
proceeding or the correctness, legality or propriety of any decision passed
or order made therein ; and if, in any case, it appears to the Registrar or the
Government that any such decision or order should be modified, annulled,
reversed or remitted for reconsideration, he or they may pass orders
accordingly:
[76.
(1)
Appeal: [Rule 49A]

Any person or society aggrieved by any decision passed or order made
under Section 6, Section 9A, Section 9B, Section 9C, Section 12A, Section
13. 3[XXX] Section 16, Section 17, Section 19, Section 21, Section 21A,
Section 21AA, Section 23, sub-section (3) of Section 32, Section 34, Section
34A, Section 60, Section 62, Section 64, Section 66, Section 70, Section
71, Section 73 and Section 117 may appeal to the Tribunal :
Provided that nothing in this sub-section shall apply to any order of withdrawal
or transfer of a dispute under sub-section (3) of Section 62.
1.
2.
3.

The words Selction 15-A omitted by Act No. 6 of 2005, w.e.f. 31.1.2005.
Provided that every application to the Registrar or the Government for the
exercise of the powers under this section shall be preferred within ninety
days from the date on which the proceeding, decision or order to which the
application relates was communicated to the applicant.
(2)
No order prejudicial to any person shall be passed under sub-section (1)

unless such person has been given an opportunity of making his
representation.
(3)
The Registrar or the Government, as the case may be, may 1[suspend the
decision or order pending the exercise of his or their power under sub-section
(1) in respect thereof.
(4)
The Registrar or the Government may award costs in proceedings under this
section, to be paid either out of the funds of the society or by such party to
the application for the revision as the Registrar or the Government may deem
fit.
CHAPTER XII
Offences and Penalties
79.
Punishment for furnishing false return or information, disobeying

summons or other lawful order, requisition, or direction, or for acting
in contravention of Section 35 or Section 36 or for failure to produce
books etc.:-
(1)
It shall be an offence under this Act, if-
(a)
the committee, an officer, employee or any member of the society wilfully

makes a false return or furnishes false information, on a lawful order or direction
issued under the provisions of this Act ;
[Explanation: For the purposes of this section, the expression Registrar

means the Registrar of Co-operative Societies for the State appointed as
such under sub-section (1) of Section 3.]
78.
Review: [Rule 56]
(1)
The appellant or the applicant for revision or the respondent may apply for
the review of any order passed under Section 76, or Section 77 on the basis
of the discovery of new and important facts which, after the exercise of due
diligence were not then within his knowledge or could not be produced by
him when the order was made, or on the basis of some mistake or error
apparent on the face of the record or for any other sufficient reason :
(2)
Provided that no application for review shall be preferred more than once in
respect of the same order.
any person wilfully or without any reasonable cause disobeys any summons,
requisition or other lawful order or direction issued under this Act ;
(c)
Every application for review shall be preferred 3[to the authority which passed
the order under Section 76 or Section 77] within such time and in such
manner as may be prescribed.
any person wilfully withholds or fails to furnish any information lawfully required
from him by a person authorised in this behalf under the provisions of this
Act ;
(d)
any person acts in contravention of Section 35 or Section 36 or sub-section

(2) of Section 48 or sub-section (3) of Section 83-B.
(e)
the committee or a member thereof wilfully fails to produce books, accounts,

documents, records, securities, cash and other properties belonging to or in
the custody of the society ;
The decision or order passed on the application in review shall be final.
(4)
The authority competent to pass orders on application for review may pass
such interlocutory orders pending the decision on the application for review
as that authority may deem fit.
1.
2.
3.
[(aa) the committee, an officer, employee or any member of the society furnishes
false information to gain admission or to continue as member of a society or
to get elected to the managing committee or as an officer of the society or to
continue as member of the Managing Committee or as an officer of the
society ;]
(b)
(3)
(5)
[(f)
an officer, or an employee of the society including the paid Secretary

dishonestly or fraudulently mis-appropriates or otherwise converts for his
own use or intentionally causes loss to the property of the society entrusted
to him or under his control as such officer or employee or allows any other
person so to do ;
(g)
an officer, or an employee of the society is or proved to have been in

possession of any property of the society reasonably suspected to have
been stolen or unlawfully obtained ; or
(h)
any officer or employee abets any offence punishable under this Act whether
or not that offence is committed in consequence of that abetment.]
1.
2.
3.

Added by Ibid.
The authority referred to in sub-section (4) may award costs in any proceedings
for review to be paid either out of the funds of the society or by such party to
the application for review as it may deem fit.

(2)
[An offence under Clauses (a) to (e) of sub-section (1)] shall be punishable
with imprisonment for a term which may extend to 2[six months and] with
fine which may extend to five hundred rupees.3[xxx]
[(3)
An offence in sub-section (1), under-
(i)
Clause (f), shall be punishable with imprisonment for a term which shall not
be less than one year but which may extend to seven years ;
(ii)
Clause (g), shall be punishable with imprisonment for a term which may
extend to five years ; and
(iii)
Clause (h), shall be punishable with imprisonment for a term which shall not
less than six months but which may extend to five years.]
[79A. Punishment for corrupt practices:
(1)
Where any officer of a society or an employee or a paid servant or any

member of such society,
(a)
commits any irregularity in receipt or sanction of loans or in purchases or

causes, deficit in stocks; or
(b)
accepts or obtains or agrees to accept or attempts to obtain from any person

for himself or for any other person, any gratification whatever, other than
legal remuneration as a motive or reward for doing or forbearing to do any
official act or showing or forbearing to show, in the exercise of his official
functions or duties favour or disfavour to any person or rendering or attempting
to render any service or dis-service to any person; or
(c)
uses or allows the use of funds of the society otherwise than in accordance
with the provisions of this Act, rules or the bye-laws of the society; or
(d)
signs in the minutes books of committee meetings of the society without

actually attending such meetings; or
(e)
passes a meeting without proper quorum as valid, he shall be deemed to be

guilty of a corrupt practice in relation to the society.
Explanation: For the purposes of this section,

(i)
irregularity in receipt or sanction of loan includes
(i)
receipt of loan by or sanction of loan to any person who does not own or
cultivate a land or the extent of land shown in the application for loan, where
owning or cultivating land is a condition precedent for the sanction of loan;
and
(ii)
fictitious loan;
1.
2.
3.
4.
5.

The words or with both omitted by Act No. 28 of 1988, w.e.f. 9-5-1988.
(ii)
irregularity in purchases includes purchases, made with the intention to

gain wrongfully of ,
(i) sub-standard or adulterated goods;
(ii) goods by paying higher price;
(iii) goods in excess of requirement.
(2) Every person guilty of a corrupt practice shall be punishable with
imprisonment for a term which may extend upto one year or with fine which
may extend to rupees five thousand or with both.
80. Prohibition of the use of the word co-operative or its equivalent:(1) No person other than a society shall trade or carry on business under any
name or title of which the word co-operative or its equivalent in any Indian
language forms part without the sanction of the Government :
Provided that nothing in this sub-section shall apply to the use by any person
or his successor in interest of any name or title under which he traded or
carried on business at the date on which the Co-operative Societies Act,
1912 and the Co-operative Credit Societies Act, 1323-F. came into operation.
(2) Whoever contravenes the provisions of sub-section (1) shall be punishable
with fine which may extend to two hundred rupees and in the case of a
continuing offence with further fine of fifty rupees for each day on which the
offence is continued after conviction thereof.
81. Punishment for failure to give effect to decision or order:
The committee or any officer or an employee of a society who fails to give
effect to, any decision or order under Section 62, or where an appeal against
such decision or order has been filed to the order passed by the appropriate
appellate authority, such decision or order not being a money decree, shall
be punishable with fine which may extend to five hundred rupees.
82. Punishment for offences not otherwise provided for:
Any society or any officer or member thereof or any other person contravening
the provisions of this Act for which no punishment is expressly provided
herein shall be punishable with fine which may extend to fifty rupees.
1
[83.
Cognizance of offences:
(1) No court inferior to that of a Magistrate of the first class or a Metropolitan
Magistrate shall try any offence under this Act.
(2) Every offence under this Act shall, for the purpose of the Code of Criminal
Procedure, 1973 (Central Act 2 of 1974), be deemed to be cognizable.
(3) No prosecution shall be instituted under this Act without the previous sanction
of the Registrar.]
83-A 2[Omitted by the Act No. 22 of 2001 dated 25-04-2001]
1.
2.

Omitted by Ibid.
83-B. Presumption as to commission of offences in certain cases:

(1)
(a)
who draws the amounts from the financing institutions and fails to properly
disburse or account for it, has misappropriated the amounts ;
(b)
who is responsible for the custody of books and properties or who is in

actual possession thereof, fails to produce the same on requisition by the
1
[xxx]Registrar or any person authorised by him, has wilfully withheld the
same ;
(c)
(d)
(e)
(2)
(3)
[Financing Banks/Primary Agricultural

Co-op. Societies]
84.
Definitions: In this Chapter
(a)
Board means the Board of directors of 2[The Andhra Pradesh State Cooperative Bank Limited]; 3[and includes a financing bank or any person
authorised by it.]
who makes any false entries or manipulates or alters the account books of
the society, has wilfully committed the said act in order to cause loss or
damage to the society ;
(b)
(c)
who misuses the properties of the society in contravention of the provisions

of the Act and the rules made thereunder or the bye-laws of the society has
done so, for his personal benefit;
(d)
Trustee means the Trustee referred to in Section 86.
85.
Application of chapter to 6[Financing Bank/Primary Agricultural Cooperative Society]:-
who executes any documents or enters into an agreement for sale or purchase
of the land plots in contravention of the provisions of the registered bye-laws
of the society, has done so for his personal benefit and in order to cause
loss to the members of the society.
Notwithstanding the criminal liability the member, officer or employee of a

society shall be responsible to make good the loss caused to the society by
committing such offences and the same shall be recovered as arrears of
land revenue by the Registrar or the person authorised by him from the
person responsible for causing such loss or his legal heirs or any person
who has acquired the properties from such person or with the assistance of
such person.
Where any member, officer or employee of a society has made a statement

during the enquiry under Section 51 or inspection under Section 52 and the
statement is recorded by the Registrar or the person authorised by the
Registrar in exercise of their powers conferred on them under this Act, the
Court shall presume that the statement was so recorded by the Registrar or
the person authorised by him as a statement within the meaning of the
Indian Evidence Act, 1872.
[xxx]
[Financing Bank/Primary Agricultural Co-operative Society] means a cooperative society registered as such or deemed to be registered under this
Act, (Act XLIV of 1961). 5[xxx]
The provisions of this Chapter shall apply to the Financing Bank/Primary

Agricultural Co-operative Society advancing loans for the purposes herein
enumerated that is to say-
Any member, officer or employee of a society who issues any receipt shall
be deemed to have issued the same in the name of the society and shall be
responsible to account for the same.
83-C. Presumption as to statements:
1.
CHAPTER XIII
In the trial of offences by the Court it shall be presumed until the contrary is
proved that any member, officer or employee of a society ;
(i)
land improvement and productive purposes ;
(ii)
the erection, rebuilding or repairing of houses for agricultural purposes ;
(iii)
the purchase or acquisition of title to agricultural lands by tenants; or
(iv)
the liquidation of debts of agriculturists under the relevant law for the time
being in force ;
[(v)
the acquisition, construction, rebuilding or repairing of rural dwelling houses.]
Explanation:- Land improvement or productive purpose means any work,

construction or activity which adds to the productivity of the land, in particular
includes the following, that is to say1.
2.
3.
4.
5.
6.
7.
Subs. by A.P. Act No. 19 of 1976 and later by A.P. Act No. 1 of 1987.
Omitted by Act No. 14 of 1994, w.e.f. 30-4-1994.
(a)
(b)
construction and repair of wells (including the tube wells), tanks and other
works for the storages, supply or distribution of water for the purpose of
agriculture, or for the use of men and cattle employed in agriculture ;
87.
Trustee to be a corporation sole:

The trustee shall be a corporation sole by the name of the Trustee for the
debentures, and as such shall have perpetual succession and a common
seal and in his corporate name shall sue and be sued.
renewal or reconstruction of any of the foregoing works, or alterations therein,

or additions thereto ;
88.
Issue of debentures by the Board:
(c)
preparation of land for irrigation ;
(1)
(d)
drainage, reclamation from rivers or other waters, or protection from floods or

from erosion or other damage by water, of land used for agricultural purposes
; or waste land which is cultivable,
(e)
bunding and similar improvements ;
(f)
reclamation, clearance and enclosure or permanent improvement of land for

agricultural purposes ;
With the previous sanction of the trustee, and the Government and subject
to such terms and conditions as the Government may impose, the Board
may, from time to time, issue debentures of such denominations for such
periods as it may deem expedient, on the security of the mortgages held or
mortgages partly held and partly to be acquired and other assets transferred
or deemed to have been transferred under the provisions of Section 94, by
the 1[Primary Agricultural Co-operative Societies to the financing bank and
by the financing bank to the Andhra Pradesh State Co-operative Bank Limited
shall be substituted, and other properties of such Bank.
(g)
horticulture ;
(2)
(h)
purchase of oil-engines, pumping sets and electrical motors for any of the
purposes mentioned herein ;
(i)
purchase of tractors or other agricultural machinery ;
Such debentures may contain a term fixing a period not exceeding ten years
from the date of issue during which they shall be irredeemable, reserving to
the Board the right to call in at any time any of the debentures in advance of
the date fixed for redemption, after giving to the debenture-holder concerned
not less than three months notice in writing.
(j)
increase of the productive capacity of land by addition to it of special variety

of soil ;
(3)
(k)
construction of permanent farm houses, cattle sheds, and sheds for

processing of agricultural produce at any stage ;
The total amount due on the debentures already issued and outstanding
together with that proposed to be issued shall not exceed the aggregate
of
(a)
(l)
purchase of machinery for crushing sugarcane, manufacturing gur or

khandasari or sugar ;
(m)
such other purposes as the Government may specify from time to time, by
notification in the Andhra Pradesh Gazette.
the amounts due on the mortgages and the value of the other assets
transferred or deemed to have been transferred under the provisions of Section
94 to the Andhra Pradesh State Co-operative Bank Limited and subsisting at
such time ;
(b)
the accumulations in the sinking funds ;
86.
Appointment of Trustee and his Powers and functions:
(c)
the cash on hand and balances with banks and the body value or market
value of securities under general funds, whichever is less.
(1)
The Registrar, or where the Government appoint any other person in this
behalf, such person, shall be the Trustee for the purpose of securing the
fulfilment of the obligation of the Andhra Pradesh State Co-operative Bank
Limited] to the holders of debentures issued by the Board.
89.
Charges of debenture-holders on certain properties:
(2)
1.
The powers and functions of the trustee shall be governed by the provisions
of this Act and by the instrument of trust executed between the 1[Andhra
Pradesh State Co-operative Bank Limited] and the Trustee as modified, from
time to time, by mutual agreement between the Board and the Trustee.
The holders of the debentures shall have a floating charge on

(a)
all such mortgages and assets as are referred to in Clause (a) of sub-section
(3) of Section 88 ;
(b)
the amount paid under such mortgages and remaining in the hands of the
Board or of the Trustee ; and
(c)
the other properties of the Andhra Pradesh State Co-operative Bank Limited.
1.
2.

90.
Guarantee by Government of principal of, and interest on,

debentures:
(1)
The principal of, and interest on, the debentures issued under the Andhra
Pradesh (Andhra Area) Co-operative Land Mortgage Banks Act, 1934 and
those issued under Sec. 88 shall, in respect of such maximum amount as
may be fixed by the Government and subject to such conditions as they
may think fit to impose, carry the guarantee of the Government;
(2)
The Government may, subject to the provisions of any Act in that regard,
increase the maximum amount of any guarantee under sub-section (1).
(3)
The Government may, after consulting the Board and the Trustee,
92.
The 1[mortgage created in favour of] 2[Financing Bank/Primary Agricultural

Co-operative Society shall have priority over any claim of the Government
arising from a loan under the Land Improvement Loans Act, 1883 granted
subsequent to the 1[creation of the mortgage.]
93.
Right of 2[Financing Bank/Primary Agricultural Co-operative Society]

or of the 3[Andhra Pradesh State Co-operative Bank Limited] to
purchase mortgaged property:
(1)
Notwithstanding anything in any other law for the time being in force, it shall
be lawful for 2[Financing Bank/Primary Agricultural Co-operative Society] or
the -3[Andhra Pradesh State Co-operative Bank Limited] to purchase any
mortgaged property sold under this Chapter, and the property so purchased
shall be disposed of by such bank by sale within such period as may be
fixed by the Trustee.
(2)
Nothing in the 3[Andhra Pradesh Land Reforms (Ceiling on Agricultural

Holdings) Act, 1973] fixing a maximum limit of agricultural holding shall apply
to the acquisition of land by 2[Financing Bank/ Primary Agricultural Cooperative Society] or the 4[Andhra Pradesh State Co-operative Bank Limited]
under sub-section (1).
(a) by notification in the Andhra Pradesh Gazette ; and

(b) by notice of not less than fourteen days in such of the important news
papers in the State and of other States in India as a Government may select
in this behalf,
withdraw any guarantee given by them or restrict the maximum amount
thereof or modify the conditions, subject to which it was given with effect
from a specified date, not being earlier than six months from the date of the
publication of the notification referred to in Clause (a):
Provided that the withdrawal, restriction or modification of any guarantee
under this sub-section, shall not in any way affect the guarantee carried by
any debentures issued under the Andhra Pradesh (Andhra Area) Co-operative
Land Mortgage Banks Act, 1934 or under this Act prior to the date on which
such withdrawal, restriction or modification, takes effect.
(4)
Every notification and notice referred to in sub-section (3), shall where the
maximum amount of the guarantee is to be restricted, or the conditions
subject to which the guarantee was given are to be modified, set forth
precisely the scope and effect to the restriction or modification, as the case
may be.
91.
Other guarantee by Government:

Where a1[ Andhra Pradesh State Co-operative Bank Limited] or 2[Financing
Bank/Primary Agricultural Co-operative Society] has given a loan to a member
for the development of any land in excess of the amount of the loan to which
such member would be entitled on the basis of the value of the land as
determined in accordance with the principles of valuation approved by the
Government, the Government may guarantee for a specified amount the
repayment of the loan to the extent of the excess.
1.
2.

Priority mortgage over certain claims:
94.
[Mortgages created in favour of] 2[Financing Bank/Primary Agricultural

Co-operative Society] to stand vested in 3[Andhra Pradesh State Cooperative Bank Limited]:
The 1[mortgages created in favour of, and all other assets transferred to,
2
[Financing Bank/ Primary Agricultural Co-operative Society] by the members
thereof shall, with effect from 1[the date of such creation] or transfer, be
deemed to have been transferred by such Financing Bank/Primary Agricultural
Co-operative Society to the 3[Andhra Pradesh State Co-operative Bank
Limited] and shall vest in the Trustee.
95.
Power of 2[Financing Bank/Primary Agricultural Co-operative Society]

to receive moneys and grant discharges:
Notwithstanding that 1[a mortgage created in favour of] 2[Financing Bank/
Primary Agricultural Co-operative Society] has been transferred, or is deemed
under the provisions of Section 94 to have been transferred to the 3[Andhra
Pradesh State Co-operative Bank Limited]
1.
2.
3.

(a)
all money due under the mortgage shall, in the absence of any specific
direction to the contrary issued by the Board or Trustee and communicated
to the mortgagor, be payable to the Financing Bank/Primary Agricultural Cooperative Society] and such payment shall be as valid as if the mortgage
has not been so transferred ; and
(b)
the Financing Bank/Primary Agricultural Co-operative Society shall, in the

absence of any specific direction to the contrary issued the Board of Trustees
and communicated to the Financing Bank/Primary Agricultural Co-operative
Society be entitled to sue on the mortgage or take any other proceeding for
the recovery of the moneys due under the mortgage.
96.
Right of Financing Bank/Primary Agricultural Co-operative Society

to pay prior debts of mortgagor:
(1)
Where a mortgage is created in favour of Financing Bank/Primary Agricultural

Co-operative Society for payment of prior of the debts of the mortgagor; the
bank may, notwithstanding anything in the Transfer of Property Act, 1882,
by notice in writing, require any person to whom any such debt is due, to
receive payment of such debt or part thereof from the bank at its registered
office within such period as may be specified in the notice.
(2)
Where any such person fails to receive such notice or such payment, such
debt or part thereof, as the case may be, shall cease to carry interest from
the expiration of the period specified in the notice:
Provided that where there is a dispute as regards the amount of any such
debt, the person whom such debt is due shall be bound to receive payment
of the amount offered by the [Financing Bank/Primary Agricultural Co-operative
Society towards the debt but such receipt shall not prejudice the right, if
any, of such person, to recover the balance claimed by him.
97.
as may be prescribed calling upon all persons interested to make their

objections to the loan if any before the date specified therein. The person by
whom such public notice shall be given and the manner in which the objections
shall be disposed of by him, shall be such as may be prescribed.
(2)
The prescribed person shall consider every objection made under sub-section
(1) and pass an order in writing either upholding or overruling it. When the
objection is overruled, he shall recommend the application to the Financing
Bank/Primary Agricultural Co-operative Society for its consideration :
Provided that when the question raised by an objection is in the opinion of
such person one of such a nature that it cannot be satisfactorily decided
except by a Civil Court, he shall postpone the proceedings on the application
until the question has been so decided.
(3)
A notice under sub-section (1), published in the manner prescribed, shall,

for the purpose of this Act be deemed to be proper notice to all persons
having or claiming interest in the land to be improved, or offered as security
for the loan.
(4)
Where an application is recommended under sub-section (2), the Financing

Bank/Primary Agricultural Co-operative Society shall, in accordance with
the rules made in this behalf, consider such application for the purposes of
making the loan.
99.
Order granting loan conclusive of certain matters:

A written order by the 1[Financing Bank/Primary Agricultural Co-operative
Society], or persons or committees authorised by this Act or under the byelaws of the bank to make loans for all or any of the purposes specified in
Sec. 85 granting, either before or after the commencement of this Act, a
loan to or with the consent of a person mentioned therein, for the purpose of
carrying out the work specified therein, for the benefit of the land or for the
productive purpose specified therein, shall, for the purposes of this Act be
conclusive of the following matters, namely:
Power of 1[Financing Bank/Primary Agricultural Co-operative Society]

to advance loans and to hold lands:
Subject to the provisions of this Act and in accordance with the rules made
thereunder, it shall be competent for Financing Bank/Primary Agricultural
Co-operative Society to advance loans for the purposes referred to in Section
85 and to hold lands the possession of which is transferred to it under the
provisions of this Chapter.
(a)
that the work described or the purpose for which the loan is granted, is an
improvement or productive purpose, as the case may be, within the meaning
of Section 85 ;
98.
Mode of dealing with applications for loans: [Rule 57]
(b)
(1)
When an application for a loan is made for any of the purposes mentioned in
Section 85, a public notice shall be given of the application in such manner
that the person had at the date of the order a right to make such an
improvement, or incur expenditure for productive purpose as the case may
be ; and
1.
1.
(c)
on application being made to him in that behalf by 1[Financing Bank/Primary

Agricultural Co-operative Society] to recover sums due to the bank, including
for cost of such recovery.
that the improvement is one benefitting the land specified and productive
purpose concerns the land offered as security, or an any part thereof as may
be relevant.
(2)
Any sum due to Financing Bank/Primary Agricultural Co-operative Society

shall be recoverable by the Collector, or any officer specially authorised by
the Collector, in his behalf, in all or any of the following modes, namely:
(a)
from the borroweras if they were arrears of land revenue due by him ;
(b)
out of the land for the benefit of which the loan has been granted-as if they
were arrears of land revenue due in respect of that land
101. Recovery of loans on certificate by Registrar:
(c)
from a surety, if any, as if they were arrears of land revenue due by him;
(1)
(d)
out of the property comprised in the collateral security, if any according to

the procedure for the realisation of land revenue by the sale of immovable
property other than the land on which the revenue is due.
100. Recovery of loans by 1[Financing Bank/Primary Agricultural Cooperative Society]:

Any loan granted by 1[Financing Bank/Primary Agricultural Co-operative
Society], including any interest chargeable thereon, and costs, if any, incurred
in connection therewith, shall, when they become due, be recoverable by
the Financing Bank/Primary Agricultural Co-operative Society.
Notwithstanding anything in this Act, on an application made by Financing

Bank/Primary Agricultural Co-operative Society for the recovery of arrears of
any sum advanced by it to any of its members and on its furnishing a
statement of accounts in respect of the arrears, the Registrar may, after
making such enquiries as he deems fit, grant a certificate for the recovery of
the amount stated therein to be due as arrears.
(2)
A certificate by the Registrar under sub-section (1) shall be final and conclusive
as to the arrears due. The arrears stated to be due therein shall be recoverable
by the Collector in the same manner as arrears of land revenue.
(3)
It shall be lawful to the Collector to take any precautionary measure until the
arrears due to the Financing Bank/Primary Agricultural Co-operative Society
together with interest and any incidental charges incurred in the recovery of
such arrears, are paid or security of such arrears is furnished to the
satisfaction of the Registrar.
(4)
It shall be competent for the Registrar or a person authorised by him to

direct conditional attachment of the property of the mortgagor until the arrears
due to the 1[Financing Bank/Primary Agricultural Co-operative Society]
together with interest and any incidental charges incurred in the recovery of
such arrears, are paid or security for payment of such arrears is furnished to
the satisfaction of the Registrar and the provisions of Section 73 shall apply
mutatis mutandis to conditional attachment of any property made or to be
made under this section.
103. Distraint and sale: [Rule 53(1)]

(1)
If any instalment payable under 2[a mortgage created in favour of] 1[Financing
Bank/Primary Agricultural Co-operative Society] or any part of such instalment
has remained unpaid for more than one month from the date on which it fell
due, the committee, may in addition to any other remedy available to the
Bank apply to the Registrar or such other person on whom the power of the
Registrar to recover any amount due by attachment and sale of property has
been conferred by the Government under Section 3 for the recovery of such
instalment or part thereof by distraint and sale of the produce of the mortgaged
land including the standing crops thereon and any other movable property of
the defaulter. On receipt of such application, the Registrar or such other
person may notwithstanding anything in the Transfer of Property Act, 1882,
direct distraint and sale of such produce and if necessary, also of such other
movable property; of the defaulter :
Provided that such implements of husbandry and such cattle of the defaulter
as may in the opinion of the Registrar or such other person, be necessary to
enable the defaulter to earn his livelihood as an agriculturist shall not be
liable for such distraint and sale:
Provided further that no such distraint shall made after the expiration of
3
[twenty four months] from the date on which the instalment fell due.
102. Collector to make recoveries during a certain period:

(1)
During such period as the Government, may by general or special order

notify in the Andhra Pradesh Gazette, it shall be competent for the Collector,
(2)
The value of the property distrained shall be, as far as may be, equal to the
amount due and the expenses of the distraint and the costs of the sale.
1.
1.
2.
3.

104. Power of sale when to be exercised:

(1)
Notwithstanding anything in the Transfer of Property Act, 1882, [the

Committee of the Financing Bank or any person authorised by the Primary
Agricultural Co-operative Society] in this behalf shall, in case of default of
payment of mortgage money due, have power, in addition to any other remedy
available to the bank, to bring the mortgaged property to sale without the
intervention of the Court :
(2)
No such power shall be exercised unless and until,
(a)
the Board has previously authorised the exercise of the powers conferred by
sub-section (1) after considering the representations, if any, of the mortgagor
;
(b)
registered notice requiring payment of such mortgage money or part has

been served upon
(i)
the mortgagor ;
(ii)
any person who has any interest in or charge upon the property mortgaged
or in or upon the right to redeem the same ;
(iii)
any surety for the payment of mortgage debt or any part thereof; and
(iv) any creditor of the mortgagor who has in a suit for the administration of
his estate obtained a decree for sale of the mortgaged property ; and
(c)
insufficient unless the value of the mortgaged property exceeds the amount
for the time being due on the mortgage by such proportion as may be specified
in the bye-laws of the Financing Bank/ Primary Agricultural Co-operative
Society.
106. Power of Board or Trustee to distraint and sell all property, etc.:
(1) The Board or the Trustee may direct the committee of Financing Bank/
Primary Agricultural Co-operative Society to take action against a defaulter
under Section 103, Section 104 or Section 105 and if the committee neglects
or fails to do so, the Board or the Trustee may take such action.
(2)(a) where such action is taken by the Board, the provisions of this Chapter and
of any rules and regulations made in this behalf shall apply as if all references
to the Financing Bank/Primary Agricultural Co-operative Society and to its
committee in the said provisions were references to the 1[Andhra Pradesh
State Co-operative Bank Limited] and the Board respectively,
(b)
107. Title of purchaser not to be questioned on ground of irregularity,

etc.:
Whereas any property is sold in the exercise or purported exercise of a
power of a sale under Section 104, the title of the purchaser shall not be
questioned on the ground that
default has been made in payment of such mortgage money due for three
months after such service.
105. Powers of 2[Financing Bank/Primary Agricultural Co-operative Society]

where mortgaged property is destroyed or security becomes
insufficient:Where any property mortgaged to 2[Financing Bank/Primary Agricultural Cooperative Society] is wholly or partially destroyed or the security is rendered
insufficient and the mortgagor, having been given an opportunity by the
committee of the 2[Financing Bank/Primary Agricultural Co-operative Society]
of providing further security enough to make the whole security sufficient or
of repaying such portion of the loan as may be determined by the committee,
has failed to provide such security or to repay such portion of the loan, the
whole of the loan shall be deemed to fall due at once and the committee
shall be entitled to take action against the mortgagor under Section 103 or
Section 104 for the recovery thereof.
(a)
the circumstances required for authorising the sale had not arisen, or
(b)
due notice of the sale was not given, or
(c)
the power of sale was otherwise improperly or irregularly exercised ; but any
person who has suffered any damage by an unauthorised, improper or irregular
exercise of any such power is entitled to have a remedy in damages against
the 2[Financing Bank/Primary Agricultural Co-operative Society].
108. Mortgage not to be questioned on insolvency of mortgagor:
Explanation: For the purposes of this section, security is deemed to be

1.
2.

Where such action is taken by the Trustee the provisions of this Chapter
and of any rules and regulations made in this behalf shall apply as if all
references to the Financing Bank/Primary Agricultural Co-operative Society
or to its committee in the said provisions were references to the Trustee.
1.
2.
3.
Notwithstanding anything in any law relating to insolvency, 3[a mortgage

created in favour of] 2[Financing Bank/Primary Agricultural Co-operative
Society], shall not be called in question on the ground that it was created in
good faith for valuable consideration or on the ground that it was created in
order to give the 2[Financing Bank/ Primary Agricultural Co-operative Society\
, a preference over the other creditors of the mortgagor.
Subs. by A.P. Act No. 14 of 1994. w.e.f. 30-4-1994.
109. Appointment of receiver and his powers:

(1)
The Board may, on the application of 1[Financing Bank/Primary Agricultural

Co-operative Society] and under circumstances in which the power of sale
conferred by Section 104 may be exercised, appoint in writing a receiver of
the produce and income of the mortgaged property or any part thereof and
such receiver shall be entitled either to take possession of the property or
collect its produce and income, as the case may be, to retain out of any
money realised by him, his expenses of management including his
remuneration, if any, fixed by the Board and to apply the balance in accordance
with provisions of sub-section (8) of Section 69-A of the Transfer of Property
Act, 1882.
Co-operative Bank Limited], where the bank concerned sends, within such
time and in such manner as may be prescribed, a copy of the instrument,
requiring registration to the registering officer having jurisdiction who shall
file such copy in the book maintained under Section 51 of that Act.
112.
Delegation of certain powers by Board:

The Board may, if it thinks fit, delegate all or any of its powers under Sections
104, 106 and 109 to an executive committee consisting of two or more of its
members, constituted by it.
113.
Sections 102,103 and 104 of the Transfer of Property Act, 1882, to apply
to notices under this Chapter:
(2)
The Board may, for sufficient cause, remove such receiver on an application
made by the mortgagor and fill a vacancy in the office of the receiver.
(3)
Nothing in this section shall empower the Board to appoint a receiver where
the mortgaged property is already in the possession of a receiver appointed
by a competent Court.
114.
Mortgagors power to lease:
(1)
[A mortgage created] in favour of 1[Financing Bank/Primary Agricultural Cooperative Society] either before or after commencement of this Act, by the
manager of a Joint Hindu Family, shall notwithstanding any law to the contrary,
be binding on the members thereof, whether majors or minors, if the loan
secured by the mortgage was granted for the purchase of any land or the
improvement of any agricultural land or for the improved cultivation of such
land.
(2)
Where such mortgage is called in question on the ground that it was created
by the manager of a Joint Hindu Family, for a purpose not binding on the
members thereof, whether majors or minors, the burden of proving the same
shall, notwithstanding any law to the contrary, be on the party raising it.
110.
The provisions of Sections 102 and 103 of the Transfer of Property Act,
1882, and of any rule made by the High Court under Section 104, of that Act
for carrying out the purposes of the said sections, shall apply so far as may
be, in respect of all notices to be served under this Chapter.
Notwithstanding anything in the Transfer of Property Act, 1882, or any other

law for the time being in force, a mortgagor shall not grant a lease of the
mortgaged property for a period exceeding six years and any lease granted
in contravention thereof shall be void.
111.
(1)
Registration of documents executed on behalf of 1[Financing Bank/

Primary Agricultural Co-operative Society] or of the 2[Andhra Pradesh
State Co-operative Bank Limited]: [Rule 60B]
Notwithstanding anything in the Indian Registration Act, 1908, it shall not be
necessary for any officer of 1[Financing Bank/Primary Agricultural Co-operative
Society] or of the 2[Andhra Pradesh State Co-operative Bank Limited] to
appear in person or by agent at any registration office in any proceedings
connected with the registration of any instrument executed by him in his
official capacity or to sign as provided in Section 58 of that Act.
(2)
Where any instrument is so executed, the registering officer to whom such

instrument is presented for registration may, if he thinks fit, refer to such
officer for information in regard thereto, and on being satisfied of the execution
thereof shall register the instrument,
(3)
Notwithstanding anything in the Indian Registration Act, 1908, it shall not be

necessary to register mortgages executed in favour of 1[Financing Bank/
Primary Agricultural Co-operative Society] or of the 2[Andhra Pradesh State
1.
2.

Mortgages created] by manager of Joint Hindu Family:

3
114-A & 114-B 4[Omitted by Act No. 1 of 1987]

115. Power of the Board to supervise and make regulation:
1.
2.
3.
4.
5.
Subject to the provisions of this Act, the Board shall have such power of
supervision over the 1[Financing Bank/Primary Agricultural Co-operative
Society] including powers of appointment, transfer and disciplinary action,
in respect of the employees of the 1[Financing Bank/ Primary Agricultural
Co-operative Society] 5[xxx] and may, with the previous approval of the
Registrar, make such regulation as may be necessary for carrying out all or
any of the purposes of this Chapter.
Subs. by A.P. Act No. 14 of 1994. w.e.f. 30-4-1994.
Omitted by Act No. 21 of 1985, w.e.f. 22-4-1985.
officer therefor made with the previous sanction in writing or on the requisition
of the Reserve Bank shall not be liable to be called in question in any manner
; and
[CHAPTER XIII-A
Eligible Co-operative Banks

115-A.Definitions:
In this Chapter
(a)
The said Act means the Deposit Insurance Corporation Act, 1961 (Central
Act 47 of 1961) ;
(b)
eligible Co-operative Bank means a co-operative bank as defined in clause

(gg) of Section 2 of the said Act ;
(c)
Corporation means the Deposit Insurance Corporation established under

Section 3 of the said Act ;
(d)
Reserve Bank means the Reserve Bank of India constituted under the
Reserve Bank of India Act, 1934 (Central Act 2 of 1934) ;
(e)
all other expressions used in this Chapter but not defined shall have the
meaning respectively assigned to them in the said Act.
115-B.Special provisions applicable to eligible Co-operative Banks:

Notwithstanding anything in this Act, the following provisions shall apply to
an eligible co-operative bank, namely:
(i)
an order for the winding up, or an order sanctioning a scheme of compromise

or arrangement or of amalgamation or reconstruction, of the bank may be
made under the provisions of this Act only with the previous sanction in
writing of the Reserve Bank ;
(ii)
an order of the winding up of the bank shall be made under the provisions of
this Act, if so required by the Reserve Bank in the circumstances referred to
in Section 13-D of the said Act ;
(iii)
if so required by the Reserve Bank in the public interest or for preventing the
affairs of the bank being conducted in a manner detrimental to the interests
of the depositors or for securing the proper management of the bank, an
order shall be made under the provisions of this Act for the supersession of
the committee of management or other managing body (by whatever name
called) of the bank and the appointment of a special officer therefor for such
periods not exceeding five years in the aggregate as may, from time to time,
be specified by the Reserve Bank;
(iv)
an order for the winding up of the bank or an order sanctioning a scheme of

compromise or arrangement or of amalgamation or reconstruction or an order
for the supersession of the committee of management or other managing
body (by whatever name called) of the bank and the appointment of a special
1.
(v)
the liquidator or the insured bank or the transferee bank, as the case may
be, shall be under an obligation to repay the corporation in the circumstances
to the extent and in the manner referred to in Section 21 of the Act.]
CHAPTER XIV
(c)
Miscellaneous
1
[116. Powers of Registrar to appoint supervisory staff:

The Registrar may, by general or special order, appoint any person to exercise
supervision over, and to assist in the working of any society or class of
societies subject to such terms and conditions as may be prescribed. The
person so appointed shall exercise such powers as may be prescribed and
shall at all reasonable times, have free access to the books, accounts,
documents, securities, records, cash and other properties belonging to, or
in the custody of, the society and may also call for such information,
statements and returns as may be necessary for the purpose.
(d)
116-A. Constitution of common cadre of Employees for certain Societies:

[Rule 72,74]
Officer ;
Spinning Mills:
(i) Managing Director, Mill Manager ;
(ii) Spinning Master ;
(iii) Deputy Spinning Master ;
(iv) Assistant Spinning Master ;
(v) Supervisor ;
(vi) Electrical Engineer ;
(vii) Electrical Supervisor ;
(viii) Chief Accounts Officer and Accountant.
Sugar Factories:
(i) Chief Engineer ;
(ii) Chief Chemist ;
(iii) Chief Agricultural Officer ;
(iv) Chief Accounts Officer ;
(v) Administrative Officer ;
(vi) Labour Welfare Officer.
(1)
Notwithstanding anything in this Act, the Registrar shall have power to

constitute a common cadre for the following posts, namely:
(a)
Co-operative Banks:
(i)
General Managers of Co-operative Central Banks and Deputy General

Managers of Apex Bank,
(ii)
Deputy Managers of Co-operative Central Banks and Assistant General

Managers ofAndhra Pradesh State Co-operative Bank.
(b)
Andhra Pradesh Co-operative Dairy Development Federation:
(i)
Executive Director, Director (Operation), Director (Planning and Development),

Director (Civil), Director (Finance and Accounts) :
(ii)
General Manager, Joint Director, Chief Quality Control Officer, Research

Officer, Chief Dairy Economist;
(iii)
Deputy Director, Cost Accounts Officer, Senior Accounts Officer, Senior Dairy
Engineer, Executive Engineer (Civil), Plant Manager, Production Manager,
Deputy Director (Stores); Deputy Director (Public Relations);
The common cadre for all categories of employees other than those specified
in Section 116-A, constituted before the commencement of the Andhra
Pradesh Co-operative Societies (Amendment) Act, 1985 and existing at such
commencement shall stand abolished with effect on and from the
commencement, and upon such abolition, it shall be lawful for the Registrar,
to allot, subject to such rules as may be made in this behalf, the employees
included in the cadre so abolished to such Primary Agricultural Credit
Societies as he may deem fit :
(iv)
Assistant Director, Accounts Officer, Personnel Manager, Manager Grade-1,

Dairy Manager, Deputy Material Manager, Dairy Economist, Works Manager;
Provided that until they are allotted as aforesaid they shall continue in the
posts in which they are working at the commencement of the said Act.
(v)
Manager Grade-11, Assistant Dairy Manager, Assistant Office Manager,

Junior Engineers (Mechanical), (Civil and Electrical), Assistant Accounts
1.
Sections 116-A and 116-AA subs. for original Section 116-A by Act No. 21 of 1985,
w.e.f. 22-4-1985.
(2)
The classification and methods of recruitment, conditions of service, pay

and allowances and discipline and conduct of the officers specified in subsection (1) shall be such as may be provided by regulations to be framed by
the Registrar.
116-AA. Abolition of Centralised services for certain categories of

employees:
[116-B. Power of Government to give directions to societies, etc.:The Government may give directions, to a society or class of societies or an
appointment committee constituted under Section 116A to make provision,-
1.
(a)
for the reservation of appointments or posts under any such society in any
cadre created under the said Section in favour of, or
(b)
for the grant of any special concessions in the matter of appointment to any
such posts or cadre to, the Scheduled Castes, the Scheduled Tribes and
the Backward Classes and the society or the appointment committee shall
be bound to comply with such directions and to give effect to any provisions
so made.
the committee is superseded by the Registrar and a special officer or managing

committee is appointed under Section 34, or where the society is ordered to
be wound up and a liquidator is appointed under Section 65, and such 1[new
committee, person, special officer, managing committee, liquidator or official
assignee] is resisted in, or prevented from, obtaining possession of the books,
accounts, documents, securities, cash and other properties, whether movable
or immovable, of the society (hereafter in this Section referred to as the
records and the properties of the society) by the previous committee or
superseded committee or by the society which has been ordered to be wound
up or by a person who is not entitled to be in possession of the records and
properties of the society, the Registrar shall, on application by 1[new
assignee] if satisfied, authorise in the prescribed form setting forth the reasons
therefor, any officer subordinate to him, not below the rank of a Senior Inspector
of Co-operative Societies, to enter, search, or break open any premises
where such records and properties of the society are kept and to seize any
such records and properties of the society and to cause delivery to the 1[new
assignee], of the records and properties of the society.
Explanation: For the purpose of the Explanation under clause (b) of the proviso
to sub-section (1) of Section 31 and this section
(a)
Scheduled Castes means castes, races or tribes or parts or groups within

castes, races or tribes which are specified by the President of India by a
public notification under Clause (1) of Article 341 of the Constitution;
(b)
Scheduled Tribes, means tribes or tribal communities or parts or groups

within tribes or tribal communities which are specified by the President of
India by a public notification under Clause (1) of Article 342 of the Constitution
;
(c)
Backward Classes means such groups of citizens which are classified by

the Government as socially and educationally backward classes of citizens.]
[116-C. Staffing pattern of societies: [Rule 28,36B]
[(1)
(2)
117.
A society shall have power to fix the staffing pattern, qualifications, pay
scales and other allowances for its employees with the prior approval of the
Registrar of Cooperative Societies subject to the condition that expenditure
towards pay and allowances of the employees shall not exceed two percent
of the working capital or thirty percent of the Gross profit, in terms of actuals
in a year whichever is less.]
No appointment or removal of a Chief Executive by whatever name called of
any society, or class of societies as may be prescribed which are in receipt
of financial aid from the Government, shall be made without the prior approval
of the Registrar of Co-operative Societies.]
(2)
For the purpose of the proceedings under sub-section (1) the authorisation
aforesaid shall be conclusive evidence that the records and properties to
which it related belong to the society.
(3)
The officer authorised under sub-section (1) may take such police assistance
as may be necessary for the said purpose and the expenses incurred under
this section shall be borne from the funds of the society.
(4)
The provisions of Sections 100 to 102 (both inclusive) of the Code of Criminal
Procedure, 1973 (Central Act 2 of 1974) relating to searches and seizure
shall apply, so far as may be, to searches and seizure under this section.
118.
Address of society:
(1)
Every society shall have an address registered in accordance with the rules
to which all notices and communications may be sent and shall send to the
Registrar, notice of any change thereof within thirty days of the change.
(2)
It shall keep affixed a sign board describing the name of the society on the
outside of every office or branch thereof,
1.
Subs. for the words new committee, persons, special officer, managing committee
or liquidator by ibid. by Act No. 22 of 2001, dt. 25.4.2001.
[Delivery of possession of records and properties of a society: [Rule

65]
(1)
Where a new committee is elected, or a committee is nominated or a person

is appointed by 4[the Registrar under Section 15A or an official assignee
appointed under Section 9C], or a person is appointed under Section 32, or
1.
2.
3.
4.
Inserted by A.P. Act No. 21 of 1985, w.e.f. 22.4.1985.

Subs. for the words the Registrar under Section 15Aby Act No. 22 of 2001, dt.
25.4.2001.
119.
Copy of Act, Rules, Bye-laws, etc. to be open to inspection:
(1)
Every society shall keep, a copy of this Act, the rules and the bye-laws, the
last audited annual balance sheet, the profit and loss account, a list of the
members, and of the committee, open to inspection by its members, free of
charge, at all reasonable times, at its office. It shall also permit every member
to inspect such portions of the books and records in which the transactions
relating to him have been recorded.
(2)
decisions or awards passed or directions issued or actions taken in

accordance with this Act or the Rules made thereunder shall be final subject
to the provisions for appeal, revision and review and no such order, refusal,
decision, award, direction or action taken shall be liable to be called in
question in any Court or Forum.
(2)
A society shall furnish to a member, on request in writing, and on payment of

such fees as may be fixed, a copy of any of the documents mentioned in
sub-section (1) or extracts of the transactions relating to him with the society
within thirty days from the date of payment of such fees.
Provided that where the order of winding up is cancelled, the provisions of

this sub-section shall cease to apply in relation to the society and any
member thereof, but shall continue to apply to the person who acted as
liquidator.
120. Power to summon witnesses and requisition documents:

(1)
In exercising the powers conferred by or under this Act, the Tribunal, the
Registrar or any person authorised by him in this behalf by general or special
order, the arbitrator or any other person deciding a dispute, the liquidator of
a society and such other officers engaged in the relief of rural indebtedness
or officers of 1[Financing Bank/Primary Agricultural Co-operative Society]
as the Government may by notification in the Andhra Pradesh Gazette,
empower, in this behalf, shall have the power of a Civil Court while trying a
suit, under the Code of Civil Procedure, 1908 in respect of the following
matters, namely:
(a)
summoning and enforcing the attendance of any person and examining him
on oath or affirmation ;
(b)
compelling the production of any book, account, record or other document,

cash, security or other property ;
(c)
issuing a commission for the examination of any witness:
(d)
receiving evidence on an affidavit.
(2)
The Tribunal, Registrar, the person, the arbitrator, the liquidator or the officer,
as the case may be, referred to in sub-section (1) may require any person
present before it or him to furnish any information or to produce any document
forthwith in his possession or power and shall also have power to take, or to
authorise the taking of such copies of the document, or of any entries therein
as it or he may consider necessary. Copies so taken shall, when certified in
such manner as may be prescribed, be admissible in evidence for any purpose
in the same manner and to the same extent as the original document or the
entries therein, as the case may be.
122. Power to exempt societies from conditions of Registration:

Notwithstanding anything in this Act, the Government may, by special order
and for reasons to be recorded therein in each case, and subject to such
conditions, if any, as they may impose, except any society, from any of the
requirements of this Act as to Registration.
123. Power to exempt class of societies: [Rule 67]
The Government may, by general or special order and for reasons to be
recorded therein, exempt any society or any class of societies from any of
the provisions of this Act.
124. Register of members: [Rule 59]
Any register or list of members or shares kept by any society shall be prima
facie evidence of any of the following particulars entered therein:
(a)
the date on which the name of any person was entered in such register or
list as a member ;
(b)
the date on which any such person ceased to be a member.
125. Proof of entries in societys books: [Rule 60]

(1)
A copy of any entry in a book of society regularly kept in the course of its
business, shall, if certified in such manner as may be prescribed, be received
in any suit or legal proceedings as prima facie evidence, of such entry and
shall be admitted as evidence of the matters, transactions and accounts
therein recorded in the same manner and to the same extent as the original
entry itself is admissible.
(2)
A society may grant copies of any document obtained and kept by it in the
course of its business, or of any entries in such document, and any copy so
granted shall, when certified in such manner as may be prescribed, be
121. Bar of jurisdiction of Court:

2
Save as otherwise expressly provided in this Act, all orders, refusals,
1.
2.

[(1)
While a society is being wound up, no suit or other legal proceeding relating
to the business of such society shall be proceeded with, or instituted against,
the liquidator as such or against the society or any member thereof on any
matter touching the affairs of the society except by leave of the Registrar
and subject to such terms and conditions as he may impose :
this Act and every officer and employee of a society shall be deemed to be
a public servant within the meaning of Sec. 21 of the Indian Penal Code,
1860.]
admissible in evidence for any purpose in the same manner and to the same
extent as the original document, or the entries therein, as the case maybe.
(3)
No officer of a society and no officer in whose office the books of a society

are deposited after liquidation shall, in any legal proceedings to which the
society or liquidator is not a party, be compelled to produce any of the
societys books or documents the contents of which can be proved under
this section, or to appear as a witness to prove the matters, transactions
and accounts therein recorded, except under order of the Court, or the
arbitrator made for special cause.
130. Power to make rules:

(1)
The Government, may, by notification published in the Andhra Pradesh

Gazette, make rules for carrying out all or any of the purposes of this Act for
the whole or any part of the State and for any class of societies.
(2)
Every rule made under this section shall immediately after it is made, be laid
before each House of the State Legislature if it is in session and if it is not in
session, in the session immediately following for a total period of fourteen
days which may be comprised in one session or in two successive sessions,
and if, before the expiration of the session in which it is so laid or the session
immediately following, both Houses agree, in making any modification in the
rule or in the annulment of the rule, the rule shall thereafter have effect only
in such modified form or shall be annulled, as the case may be, so however
that any such modification or annulment shall be without prejudice to the
validity of anything previously done under that rule.
126. Notice necessary in suits:

No suit shall be instituted against a society or any of its officers in respect of
any act touching the constitution, management or the business of the society
until the expiration of sixty days next after notice in writing has been delivered
to the Registrar, or left at his office stating the cause of action, the name,
description and place of residence of the plaintiff and the relief which he
claims and the plaint shall contain a statement that such notice has been
so delivered or left.
127. Acts of societies not to be invalidated by certain defects:
131. Power of Government to give directions:

1
No act of society or any committee or of any officer of the society shall be

deemed to be invalid by reason only of the existence of any defect in the
organisation of the society or in the formation of the general body or the
constitution of the committee or in the appointment or election of an officer
or on the ground that such officer was disqualified for his office.
128. Protection of acts done in good faith:
[(1)
the Government may generally or in any particular matter under this Act,
issue such orders and directions, which are in accordance with the provisions
of this Act and in the interest of Cooperative movement in the State as they
may consider necessary to the Registrar and thereupon he shall give .effect
to such orders or directions and shall report to the Government in due course
the result thereof
(2)
In any case, in which a direction has been given under sub-section (1), the
Government may call for and examine the record of the proceedings of the
Registrar and pass such orders in the case as they may think fit:
No suit, prosecution or other legal proceedings shall lie against the Registrar
or any person subordinate to him or acting on his authority 1[or any nominee
of the Government] for anything which is in good faith done or intended to be
done in pursuance of any provision of this Act or of any rule or bye-law made
thereunder.
129. Certain Acts not to apply:
131-A : 2[Ommitted by Act No. 24 of 1991 ]:-2
The provisions of the Companies Act, 1956, [the Andhra Pradesh (Andhra
Area) Shops and Establishments Act, 1948 and the Andhra Pradesh
(Telangana Area) Shops and Establishments Act, 1951, shall not apply to
societies,
3
[129-A. Officers and employees to be public servants:

The Registrar or any person authorised by him to recover any amount or to
execute any orders issued or decisions taken under any of the provisions of
1.
2.
3.
Provided that before passing any order under this sub-section, the person
likely to be affected by such order shall be given an opportunity of making
his representation.

Since repealed by the A.P. Shope and Establishments Act, 1966.
Inserted by A.P. Act No. 28 of 1978 and Subs. by Act No. 15 of 1991.
132. Repeal and savings:

The following Acts, namely:
(1)
The Andhra Pradesh (Andhra Area) Co-operative Societies Act,1932.
(2)
The Andhra Pradesh (Andhra Area) Co-operative Land Mortgage Banks Act,
1934.
(3)
The Andhra Pradesh (Telangana Area) Co-operative Societies Act, 1952;

are hereby repealed :
Ommitted by Act No. 24 of 1991.
1.
2.
Provided that any society existing at the commencement of this Act which
has been registered or deemed to have been registered under the relevant
repealed Act, shall, be deemed to have been registered under this Act and
the bye-laws of such society shall, so far as they are not inconsistent with
the provisions of this Act or the rules made thereunder, continue to be in
force until altered or rescinded in accordance with the provisions of this Act
and rules made thereunder ;
Provided further that Section 8 of the Andhra Pradesh General Clauses Act,
1891, shall be applicable in respect of the repeal of the said enactments and
Sections 8 and 11 of the said Act shall be applicable as if the said enactments
had been repealed and re-enacted by an Andhra Pradesh Act.
133. Act to override other laws:
The provisions of this Act shall have effect notwithstanding anything
inconsistent therewith contained in any other law.
134. Power to remove difficulties:
If any difficulty arises in giving effect to the provisions of this Act, the
Government may, after previous publication, by order make such provisions,
not inconsistent with the purposes of this Act, as appear to them to be
necessary or expedient for removing of the difficulty.

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A.P.

A.P. Cooperative Societies Act 1964

THE ANDHRA PRADESH

CO-OPERATIVE SOCIETIES ACT, 19641

Statement of Objects and Reasons

Be it enacted by the Legislature of the State of Andhra Pradesh in Fifteenth

This Act may be called the Andhra Pradesh Co-operative Societies

It extends to the whole of the State of Andhra Pradesh.

It shall come into force on such date1 as the Government may, by

"Committee" means the governing body of a society by whatever name

Co-operative year means, the period commencing on the 1st day of

Dividend means a share of the profits of a society divided among its

Federal society means a society to which similar class of societies

Financing bank means a society, the main object of which is to assist

General meeting means a meeting of the general body of a society;

An Act to consolidate and amend the law relating to Co-operative Societies

In this Act, unless the context otherwise requires,

Short title, extent and commencement:

With effect from 1-8-1964, vide G..O.Ms.No. 1924, dt. 25-7-1964

A.P. Cooperative Laws

A.P. Cooperative Societies Act 1964

registered under this Act ;

Government means the State Government ;

[(i-a) Gram Panchayat means, a gram panchayat constituted under

to the amount, if any, unpaid on the shares held by each of

[(j-i) Mandal Parishad means a Mandal Parishad constituted under Section

to such amount as they may undertake to contribute to the

Municipal Corporation means a Municipal Corporation constituted

Municipal Council means a Municipal Council constituted under

Officer includes a person elected or appointed by a society to any

Prescribed means as prescribed by rules made under this Act;

Rebate means a share of the profits of a society divided among its

Registrar means the Registrar of Co-operative Societies appointed

Rules means the rules made under this Act ;

Society means a Co-operative society registered or deemed to be

Inserted by A.P. Act No. 4 of 1995, w.e.f. 2-1-1995.

Society with unlimited liability means a society, the members of which

State means the State of Andhra Pradesh ;

Tribunal means a Tribunal constituted under Section 75 and having

Zilla Parishad means a Zilla Parishad constituted under Section 177

Society with limited liability means a society in which the liability of

Appointment of Registrar and other persons for the purpose of this

There shall be appointed a Registrar of Co-operative Societies for the

Every other person appointed under sub-section (1) shall exercise

Society which may be registered: [Rule 2A, Rule 5]

Inserted by A.P. Act No. 4 of 1995, w.e.f. 2-1-1995.

A.P. Cooperative Laws

A.P. Cooperative Societies Act 1964

facilitating the operation of such a society, may be registered under

a true copy of the minutes of the meeting at which the

Every Society registered or deemed to be registered under this Act

a sworn statement from each applicant that he is a

Registration with limited or unlimited liability:

Explanation: For the purposes of this clause, the expression member of

A society may be registered with limited or unlimited liability but a

The liability of the Government, a financing bank or a federal society

The name of every society shall contain the expression Co-operative'

Every such application shall conform to the following requirements

Where the objects of the society include the raising of funds to

An application for the registration of a society] shall be made to the

[xxx]Registration of a society: [Rule 3, Rule 3A]

where all the applicants are individuals, the number of applicants

the application shall be accompanied by:

the application shall be signed :